If a trader tells you that they made one hundred pips profit, you do not learn anything about their financial situation. If they are trading a pair like EUR/USD where the dollar is the quote currency, a hundred pips profit would be $1,000 on a standard lot of $100,000 but only $10 on a $1,000 micro lot. To know the scale of one pip in bucks in this situation, multiply 0.0001 by the lot size.

To work out profit or loss from pips where the dollar is the quote currency, you just need to understand that one pip is $0.0001 x lot size. If you have another currency as the quote currency, the pip is naturally in that currency, and you can multiply by the exchange rate to know the pip value in bucks.

All this may appear rather baffling at first impression but anyone who starts trading will pretty soon understand what a pip means in practice. Currency trading pips are a helpful tool for measuring and recording movements in prices in foreign exchange trading.