Before you can talk about profit, stops or size, you need to describe how far price has moved. Markets use slightly different language for this, and it confuses almost every beginner at some stage.
Price
A price is a number quoted by the market. EUR/USD at 1.0850. Gold at 2400.50. The S&P 500 at 5000.25.
A move is the difference between two prices. Buy EUR/USD at 1.0850 and watch it rise to 1.0870, and price has moved 0.0020.
That number alone says nothing about money. Converting it into money requires the unit of movement and your position size, which is Topic 7.
CFDs: pips and points
CFD platforms, MetaTrader included, define both units off the quoted price itself.
Take a EUR/USD quote of 1.05455. Reading from the right:
- The last digit is a point, the smallest amount the price is allowed to change
- The second-to-last digit is a pip, the unit traders actually talk in
1.05455
^ the point (last digit)
1.05455
^ the pip (second-to-last digit)
Ten points make one pip.
Price moving from 1.05455 to 1.05456 has moved one point. Price moving from 1.05455 to 1.05465 has moved ten points, which is one pip.
The rule holds whatever the instrument and however many decimals it carries. A point is always the final digit of the quote, and a pip is always the one before it.
USD/JPY is quoted to three decimals rather than five, at 150.255. The last digit is still the point, the one before it is still the pip, and ten points still make one pip.
Futures: ticks
Futures use neither pips nor points. The unit is a tick.
A tick is the smallest increment a contract is allowed to move, written into the contract specification published by the exchange. On CME contracts the tick size is set by CME, which means every trader in that market works from the same number. It is a property of the contract, not a setting at your broker.
Worked example
The E-mini S&P 500 (ES) has a tick size of 0.25.
- Price moving from 5000.00 to 5000.25 has moved one tick
- Price moving from 5000.00 to 5001.00 has moved four ticks
Because tick size is fixed, so is the tick value, meaning the money gained or lost per tick per contract. On the ES that is 12.50 US dollars.
The Micro E-mini S&P 500 (MES) has the same 0.25 tick size, worth 1.25 dollars instead of 12.50. Same market, a tenth of the exposure.
The Futures guide covers how to read a CME contract specification and lists the values for common contracts.
What this does not tell you yet
None of these units tell you what a move is worth in money. A twenty pip move might be worth two dollars or two hundred, depending entirely on position size. That conversion is Topic 7, and the exact per-instrument values live in the CFDs and Futures guides.