What is a Fractional Pip on MetaTrader 4?

5 decimal Fractions FX Trading Quote - Fraction of a Pip in Forex Trading

Forex Brokers implement the fifth decimal quotes, the fifth point is known as the fractional Pip. Before this all quotes were 4 decimal places and that is when the last point was referred to as a pip.

Therefore, when trading always use the fourth point and not the fifth decimal as the pip value.

If you trade with a broker using 5 points (all forex brokers now use 5 decimal point format), then 1 fractional pip which is the 5th decimal place, will be equal to 1 dollar per 1 standard forex contract.

However, this is just the Fraction of a pip and not the original Pip. To Make up one Point you will have to use 10 points, (it is like rounding off to the fourth decimal point).

Example: for 5 decimal Points Quote - Fraction of a Pip on MetaTrader 4

If EURUSD moves from 1.45000 to 1.45001 then this move is equal to:

1.45001-1.45000 = 0.00001 (1/10 pipette)

Value of = 0.00001 USD

1 contract = $100,000

Value of 1/10 pipette for 1 contract = 100,000* 0.00001= $1

1/10 pipette = $1, for 5 Decimal Points Format

5 Decimal Points Currency Quote Format - What is a Fractional Pip on MetaTrader 4?

Please Note from the above screenshot how the fifth decimal point is shown in a digit much smaller than the other digits, this is to signify that it is a fraction of a pip.