Taken from Forex Kagi
FOREX trading pips are an important part of foreign exchange trading that any trader have to grasp. They’re the measure of price movements, and thus of profit and loss. Brokers customarily interpret pips into greenbacks and cents for you, or into the currency that your account is held in, if it is not US dollars. However , when comparing 2 trades with different position sizes it’s the profit or loss in pips that tells you more than the profit in bucks.
PIP stands for percentage in point. It is employed as a measure of change in price . Spread is also measured in pips. The pip is the littlest part of the measured price of a quoted currency. 1.2315. So if that price changes to 1.2316, the price has increased by one pip. So when the yen is the quote currency, one pip is 0.01 yen..