So many people talk about it, and I don't know what they are.

In forex trading a pip is increase the smallest price. Pip is short for percentage in point. Pips play a key role in Forex trading. Both profits and losses are measured in pips. If someone is saying "30 pips," they're talking about thirty units of value in a trade.

The smallest changes in currency rates are measured by Pips. Since the Forex Market is characterized by relatively small fluctuations, the pip is, in most cases, the fourth digit after the decimal point. Yet in some currencies, such as the Japanese yen, the pip is the second digit after the decimal point. By using pips, the difference between the ask and bid prices can be measured at any given time, as well as the daily volatility of these values, which ultimately determines profit or loss.

Dear jrob here is the definition explained with an easy example. I hope it'll help you to understand what is a pip.

A pip is the smallest unit of price that is traded for a currency. Most currencies are traded to four decimal points, so that a pip is 0.0001 or 1/100 of a cent. This may seem a minuscule amount until you realise that on a standard trade of $100,000 that is $10. The exception to the four decimal points is the Japanese yen which is normally traded to two decimal points.

hi there...

Most have explained what is pip and now let me tell you how pip is calculated?

Within the EUR/USD currency pair, for example:
From $1.5489 to $1.5490 – this is a rise of one pip in the currency's value.
If the bid price is at $1.5489 and the ask price is at $1.5486 – The spread between the bid and ask price is of 3 pips.

In an investment of $100,000, every pip is worth $10 (divide the sum of the investment by 10,000, as the pip is located in the fourth digit after the decimal point in this pair).

Within the USD/JPY currency pair:

From 106.63 yen to 106.64 yen – this is a rise of one pip in the currency's value.

If the bid price is at 106.63 yen and the ask price is at 106.60 yen – The spread between the bid and ask price is of 3 pips.

In an investment of $100,000, every pip is worth a 1000 yen (divide the sum of the investment by a 100, as the pip is located in the second digit after the decimal point in this pair).

Regards

Ok... understood, And how about calculating profit and loss? Kindly explain me that too.

Profit and loss are very easy...

Just subtract the selling price with buying and then multiply the number of lots your purchased. You will get the P/L