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What’s the difference between a Pip, Tick and Point?

A Pip represents the change in value between two currencies. For example, if the EUR/USD moves from 1.2250 to 1.2251 it has moved by 0.0001 or one Pip. A Tick is similar to a Pip, but it may not measure every increment equally. For example, A Tick on one instrument may be measured in increments of 0.0001 whereas another instrument may be measured in increments of 0.25. A Tick is simply the smallest increment a particular instrument can move in. A Point is a shift in the dollar amount. For example, if a share price went from $25 to $30, traders would say it has moved 5 points. For FX a point is used to refer to the 5th decimal place.

Additional Information

What is Over The Counter (OTC) trading? Can I hold positions over the weekend and major holidays? What is the difference between a Long or Short position in Forex?