2023-07-13
Every price move in a currency pair changes your profit or loss. The size of that change for a one unit move in price is the point value. Know it before you place any order. It helps you size positions properly, set realistic stops and targets, and understand risk in clear money terms.
It is the standard unit of price change in forex. For most pairs one pip is 0.0001. For JPY pairs one pip is 0.01.
On many platforms is the minimum tick. If a broker quotes EURUSD to five decimals, one point is 0.00001 which is one tenth of a pip. Ten points equal one pip.
It is the number of base currency units. Standard lot 100,000. Mini 10,000. Micro 1,000. Nano 100.
Let:
L = position size in base currency units
PS = pip size of the pair
0.0001 for most pairs
0.01 for JPY-quoted pairs
P = current exchange rate of the pair
AC = your account currency
QC = the pair’s quote currency
CR(QC → AC) = conversion rate from quote currency to your account currency
Pip value (in AC) = L × PS
Reason: one pip is always worth PS in the quote currency per unit of base currency, and you hold L units.
Examples with a USD account:
EURUSD, GBPUSD, AUDUSD, NZDUSD
Pip value per standard lot = 100,000 × 0.0001 = 10 USD
Pip value (in AC) = L × PS × CR(QC → AC)
Example with a USD account trading EURGBP:
Pip value in GBP = 100,000 × 0.0001 = 10 GBP
Convert to USD: 10 × GBPUSD rate
If GBPUSD = 1.2700 then pip value ≈ 12.70 USD
For pairs like USDJPY, USDCHF, USDCAD:
Pip value (USD) = L × PS / P
Example: USDJPY at 150.00
L = 100,000, PS = 0.01
Pip value = 100,000 × 0.01 ÷ 150.00 ≈ 6.67 USD
This matches common calculator outputs for similar prices.
If a point is one tenth of a pip, then:
Point value = pip value ÷ 10.
Identify whether one pip is 0.0001 or 0.01.
Check your lot size in base units.
Work out whether your account currency matches the pair’s quote currency.
Apply the right formula from above.
If needed, convert the result into your account currency using a live rate of QC→AC.
If your platform shows points, divide by 10 to get the point value.
Pair type: quote currency matches account currency
Standard lot
Pip value = 100,000 × 0.0001 = 10 USD
If your platform shows points, point value = 1 USD
JPY pair so PS = 0.01
Pip value = 100,000 × 0.01 ÷ 150.00 ≈ 6.67 USD
Point value ≈ 0.667 USD
Pip value in GBP = 10 GBP
Pip value in USD = 10 × 1.2700 = 12.70 USD
Pip size PS = 0.01
Pip value in EUR = 100,000 × 0.01 ÷ 163.00 ≈ 6.13 EUR
| Pair type | Pip size | Pip value per standard lot |
|---|---|---|
| XXXUSD (EURUSD, GBPUSD, AUDUSD, NZDUSD) | 0.0001 | 10 USD |
| USDXXX (USDJPY, USDCHF, USDCAD) | 0.01 for JPY, 0.0001 otherwise |
100,000 × pip size ÷ price USD |
| Crosses with quote not USD (EURGBP, EURJPY, GBPJPY etc.) | as per pair | First find value in quote currency, then convert to USD using QC→USD
|
Pip value tells you how much money you gain or lose per pip.
Position size and stop distance turn that into a cash risk number.
Leverage never changes the pip value. It only changes how big a position you can open, which changes risk.
Mixing up points and pips on five digit quotes. Points are one tenth of a pip on many platforms.
Using a stale conversion rate when your account currency differs from the quote currency.
Forgetting that JPY pairs use 0.01 as the pip size.
Assuming every broker’s contract size is identical for non FX symbols. Always check the instrument specs in your platform.
For pairs where your account currency equals the quote currency, yes. For USDJPY and other USD as base pairs, it changes with price because you divide by the current rate.
No. It affects margin and potential swings, not the value per pip.
Your pip value is 10 USD per lot, then convert USD to EUR at the current EURUSD rate.
