How is a pip calculated?

A pip is the smallest unit of price movement in forex and CFD trading. Most currency pairs are quoted to four decimal places, where 0.0001 equals 1 pip. For example, if EUR/USD moves from 1.1000 to 1.1005, that represents a rise of 5 pips. Pip values are directly used in profit/loss calculation and spread measurement. MIM provides tools to easily calculate pip values for each instrument.