What is pips?

 The smallest increment of change in a foreign price, either up or down. A pip is known as percentage interest point, and is equivalent to 0.0001 or ten-thousandths of a unit number of 1. For the Yen crosses, a pip is equivalent to 0.01

I guess this would be your first question, well, let me explain, a pip is the term used to measure the smallest price movement in a given exchange rate.  In Forex, pretty much all currency pairs are quoted to 4 decimal places, and the "pip" is the name of the that fourth decimal point.

Why do traders use pips? :This is a very fair question. The only answer really is to make their lives easier when they're talking about their positions to their friends and colleagues.  My EUR/USD Trade has moved by 5 pips" Much more pleasing to the ears. Now we know why pips are used, let's see how they're calculated https://tradexn.com/knowledge-base/ . Pssst! this is where you'll discover the major FLAW of using pips... so pay close attention 

How are Pips Calculated? 

Now https://tradexn.com/economic-calendar/if we multiply that change by 10,000 we'll discover how many pips it's moved: 0.0001 x 10,000 = 1 pip move on GBP/USD

Having positive pip gains: The best way to demonstrate the biggest problems of "pips" is with a simple example:  On the first day of the week, Charles decides to trade USD/JPY Long, and he makes 100 pips. His position size was 1 Lot.