A pip is the standard unit of movement in a currency pair. For most pairs it is the fourth decimal place, so a move from 1.1000 to 1.1001 in EUR/USD is one pip. For pairs quoted against the Japanese yen it is the second decimal place: 147.28 to 147.29 is one pip.
Brokers now quote a fifth decimal, sometimes called a pipette or point, which is a tenth of a pip. When you see a spread of 0.3 pips, that is three points.
What a pip is worth in money depends on the size of the position and the currency the pair is quoted in. For a standard lot of 100,000 units, one pip on EUR/USD is worth 10 US dollars. On a mini lot (10,000 units) it is 1 dollar, and on a micro lot (1,000 units) it is 10 cents.
If the quote currency is not your account currency, the value is converted at the current rate. That is why one pip on USD/JPY is worth a slightly different dollar amount every day. Our pip value calculator does the conversion for you.
Knowing pip value is the foundation of position sizing. Once you know what one pip costs, you can decide how many pips of stop you can afford and size the trade to match.