Pips, Lots, and Leverage Explained

A pip is the smallest standard price move a currency pair can make — usually the fourth decimal place (0.0001) for most pairs. If EUR/USD moves from 1.1050 to 1.1051, that's a one-pip move.

A lot is the size of your trade. A standard lot is 100,000 units of the base currency, a mini lot is 10,000, and a micro lot is 1,000. Beginners often start with micro lots to keep risk small while learning.

Leverage lets you control a larger position than your account balance alone would allow — for example, 1:100 leverage means $1,000 of your own money can control a $100,000 position. Leverage magnifies both gains and losses, so it should be used carefully and always alongside a clear risk management plan.