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What is a Fractional Pip on MT4 Platform Software?

5-Decimal FX Quotes: Pip Fractions Explained

Brokers now use quotes extended to five decimal places: this fifth digit is termed the fractional Pip. Prior to this change, all quotes featured only four decimal places, at which point the final digit represented the Pip.

Consequently, while engaging in trading activities, ensure you utilize the fourth digit, rather than the fifth decimal place, for determining the pip valuation.

If your broker uses a 5-point quoting system (which is standard for all contemporary online brokers with 5 decimal place quotes), then one fractional pip - representing the fifth decimal place - will equal $1 for every standard contract traded.

However, this value only constitutes a Fraction of a pip and is not the established, primary Pip measurement. To constitute a single full Point, ten of these fractional points are required (analogous to rounding to the fourth decimal place).

5-Decimal Quote Example - Pip Fractions in MT4

If EUR USD heads from 1.45000 to 1.45001 then this move is equivalent 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 and lot = 100,000* 0.00001= $1

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

5-Decimal Currency Quotes - Fractional Pips in MetaTrader 4 - What Are Pips in MT4?

The Format for Currency Quotations Displaying 5 Decimal Places - Understanding Fractional Pips on the MT4 Platform

Observe carefully, as shown in the screenshot above, that the fifth decimal digit is displayed in a noticeably smaller font than the others: this indicates that it represents a fraction of a pip.

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