Point
Trading MechanicsOn MT4 and MT5 platforms, a point is the smallest price increment. For 5-decimal pairs, 1 point = 0.00001 (one pipette), so 10 points = 1 pip.
What Is a Point in Forex?
A point is a unit of price measurement whose meaning depends on the trading platform. On MetaTrader 4 and MetaTrader 5 (the most widely used retail platforms), one point equals the minimum price increment. For 5-decimal pairs like EUR/USD, 1 point = 0.00001 = 1 Pipette. For 3-decimal JPY pairs, 1 point = 0.001.
Points vs. Pips
The most important thing to remember is: on MT4/MT5 with 5-digit pricing, 10 points = 1 Pip. This matters when setting Stop-Loss and Take-Profit levels or when coding Expert Advisors (EAs). If you want a 30-pip stop-loss, you enter 300 points in your order parameters on MT5.
Avoiding Confusion
Some traders and educational content use "point" and "pip" interchangeably, which creates confusion. In older 4-decimal pricing, 1 point did equal 1 pip. With modern 5-decimal pricing, this is no longer the case. Always check whether your platform or reference material means pips (0.0001) or points (0.00001) when discussing price distances. When in doubt, look at the decimal places in the price quote.
Related Terms
Pip
The smallest standard unit of price movement in a currency pair. For most pairs, one pip equals 0.0001. For JPY pairs, one pip equals 0.01.
Tick
The smallest possible price movement on a trading platform. In 5-decimal forex pricing, a tick is one pipette (0.00001 for most pairs, 0.001 for JPY pairs).
Pipette
A fractional pip equal to one-tenth of a pip. Shown as the fifth decimal place for most pairs (0.00001) or the third decimal for JPY pairs (0.001).
Spread
The difference between the bid (sell) price and the ask (buy) price of a currency pair. The spread is the primary cost of making a trade.