What are 3 PIPS in Forex Trading?

In the world of financial markets, particularly in Forex (foreign exchange), many terms may be unfamiliar to beginners. One such term is "PIP," which stands for "Percentage in Point." A PIP is an important unit of measurement in the Forex market, and understanding it can significantly impact how traders evaluate trades and measure profits or losses. In this article, we will explore the concept of "3 PIPS," how it affects trading in the Forex market, and how traders can use this term effectively in their strategies.   What is a PIP? Before diving into the meaning of "3 PIPS," it is essential to understand what a PIP is. A PIP is the smallest unit of price movement in a currency pair. For currency pairs like EUR/USD or GBP/USD, the PIP is the change in the fourth decimal place. For example, if the EUR/USD pair moves from 1.1050 to 1.1051, the change is 1 PIP. Sometimes, the term "Point" is used interchangeably with PIP, but it's important to note that the PIP can vary slightly depending on the type of currency pair being traded.   What Does "3 PIPS" Mean? When we talk about "3 PIPS," we are referring to a price change of 3 units in the currency pair. For example, if the EUR/USD pair is trading at 1.1050 and the price rises to 1.1053, the price has moved by 3 PIPS. While this may seem like a small move, it can be significant in the context of trading strategies. Traders can gain or lose substantial amounts based on these small price changes, especially if leverage is used.   How Do 3 PIPS Affect Trading? Profit and Loss: In the Forex market, traders can profit from even small market moves. For instance, if you open a position with a small lot size, a price move of 3 PIPS might result in a small profit or...