What Are Pips, Points, and Ticks in Trading?
The first time you start reading trading lessons, you tend to run into three words that all seem to be pointing at the same thing. Pips. Points. Ticks. They show up in spread explanations, in risk examples, in other people's screenshots of their trades, and usually nobody stops to explain why there are three different words for what looks like one idea. Before you try to use any of them, it helps to see what they each measure and where each one comes from.
What are pips, points, and ticks in trading?
Pips, points, and ticks are all units for measuring how far price moves. The word that gets used depends on the market you are in. Pips are the small standard unit used in forex. Points are the general unit used across stocks, indexes, and futures. A tick is the smallest single step a particular market allows price to take.
Quick Answer
All three answer the same question: how far did price move? They are not interchangeable in value, and you do not need to convert one into another.
Pip - the small standard unit of movement in forex.
Point - the all-purpose unit used in most other markets, including the ones beyond forex.
Tick - the smallest increment a given market lets price move. Several ticks usually make up one point.
Three words, one underlying question
Markets did not agree on a shared vocabulary. Forex developed its own word for a small price move, stock and futures markets developed theirs, and the words stuck. That is the whole reason there are three. Underneath the vocabulary, they are all doing the same job: putting a number on how far price traveled so you can talk about it, measure it, and size a trade around it.
This matters early because most beginners assume the three words describe three different things. However, they describe the same thing just in three different rooms.
Pips:
the unit you will meet in forex
A pip is the standard small unit of movement for a currency pair. On a pair like EUR/USD, one pip is a move in the fourth decimal place, so a move from 1.1050 to 1.1051 is one pip. On pairs that involve the Japanese yen, one pip sits in the second decimal place instead.
You will see pips used almost any time forex is being discussed, which is why the word feels everywhere when you are starting out. Forex is a common first market because the barrier to entry is low, so the pip is often the first unit a beginner ever meets.
Points:
the unit that travels across markets
A point is the more general word. It shows up in stocks, indexes, and futures, which is most of the trading world outside of forex. On a stock, a one-dollar move is usually described as one point. On an index, a point is one index unit of movement. Because the point is the unit that carries across so many markets, it is the one you will lean on most as you move past forex.
Ticks:
the smallest move a market allows
A tick is the smallest step price is allowed to take in a particular market. Price does not move in a perfectly smooth line. Each market sets a minimum increment, and a tick is one of those increments. Several ticks make up a point, and how many depends on the specific instrument you are trading. The thing to hold onto is the relationship: a tick is the smallest unit, a point is the larger one it builds toward, and the exact ratio between them is something the market defines.
What each unit is worth, and why that matters more than the count
Here is the part that changes how you read all three words. A pip, a point, or a tick tells you distance. It does not tell you money. The same fifty-point move can be a small gain on one position and a large one on another, depending on how big the position is and what each unit is worth in that market.
So the useful question is never just "how many points did it move." It is "what is one unit worth here, and how many units am I holding." That second question is the bridge between this terminology and how you measure risk on a trade. The distance from your entry to your stop is measured in these same units, and the value of each unit is what turns that distance into a real number on your account. The unit count is the easy half. The value is the half that actually decides what happens to your money.
Why Agorion measures in points and ticks
You will notice we teach in points and ticks rather than pips. That is deliberate. The goal here is not to turn you into a forex trader. Forex is a useful place to begin because it is accessible, but it is a starting room, not the destination. Points and ticks are the units that follow you into the other markets you may eventually trade, so learning in that language now means you are not relearning vocabulary later. This is part of the same reason the whole curriculum puts structure before complexity: the order you learn things in is doing quiet work to make the next step easier.
When you do meet pips, in a forex lesson or in the spread on a currency pair, you will recognize it for what it is. The word changes. The question it answers does not.
A simple way to hold it
Think about how speed gets measured. In some places it is miles per hour, in others it is kilometers per hour. Both are measuring the exact same real thing, which is how fast you are moving. The unit just depends on where you are standing. Pips, points, and ticks work the same way. They are local units for one universal idea: how far price moved. You do not convert between them in your head. You learn the unit of whatever market you are in and read it on its own terms.
Common beginner mistake
The most common mistake is treating the number on its own as if it means something. A new trader sees "up 40 pips" or "up 200 points" and reacts to the size of the number instead of asking what it is worth. Two people can both be up fifty points in the same session and walk away with completely different outcomes, because one was holding a much larger position than the other.
It happens because the count is visible and the value is not. The number is right there on the screen. The value per unit and the position size are a quieter calculation sitting behind it.
The corrected habit is small:
before a count means anything to you, translate it. One unit is worth this much, you are holding this many, so the move is worth that. You learn to see before you learn to act, and reading these units correctly is part of learning to see.
Most beginners do not struggle here because the math is hard. They struggle because nobody told them the count was only half the information.
Key Takeaways
Pips, points, and ticks all measure how far price moves. The word depends on the market.
Pips are the forex unit, points are the general unit used across most other markets, and a tick is the smallest step a market allows.
Several ticks make up a point, and the ratio is set by the instrument, not by you.
The unit count tells you distance, not money. Value per unit and position size are what make it real.
Agorion teaches in points and ticks because those units carry across markets, not just forex.
Frequently Asked Questions
Is a pip the same as a point?
No. A pip is the small standard unit used in forex, and a point is the general unit used across stocks, indexes, and futures. They are not interchangeable, and one pip is not equal in value to one point.
How many ticks are in a point?
It depends on the instrument. A tick is the smallest increment a particular market allows price to move, and several ticks make up a point. The exact number is defined by the market you are trading, not chosen by you.
Why does Agorion teach in points and ticks instead of pips?
Because the goal is not forex specifically. Forex is an accessible place to start, but points and ticks are the units that follow you into other markets, so learning that language early means less to relearn later.
Do I need to calculate pips, points, or ticks by hand?
No. Your charting platform shows movement and value for you. What you need is to understand what each unit represents, so the numbers on the screen actually mean something to you.
Next Step
Now that the units make sense, the natural next move is seeing them in action on a real trade. Learn how to measure a trade with the Long/Short tool, where the distance from your entry to your stop and target is measured in these same units.
This Concept Is Part Of
The Agorion Foundations series, where each concept builds on the one before it. Our entire Foundations curriculum is available inside our free community as recorded lessons with screenshares and demonstrations to walk through concepts on live charts.
If you want these pieces to build in order instead of in scattered bits, start inside The Atrium, the free beginner space where the core concepts are laid out in the sequence they are meant to be learned.
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By Rachel Pennington
Rachel Pennington is the founder of The Agorion Collective, a structured trading education platform designed to educate and support women building real skill in the market. Her approach is rooted in clarity before complexity, teaching traders to understand price, manage risk, and develop their own process step-by-step.