Calculate pip value

What is a pip?

A pip (percentage in point) is the smallest standardized price change in a currency pair. For most currency pairs, one pip is 0.0001 (the fourth decimal place). For pairs with Japanese yen (e.g. USD/JPY), one pip is 0.01 (the second decimal place).

Why does pip value matter?

To manage risk properly, you need to know exactly what each pip is worth in your account. Otherwise, what looks like a small 50 pip move could turn out to be a large loss if your position is too big.

How is pip value calculated?

For one standard lot (100,000 units) of EUR/USD, one pip is worth 10 USD. For other currencies, the value must be converted to your account currency. If your account is in EUR and the pip value is 10 USD ≈ 9.25 EUR (at rate 1.08).

Practical example

You have an account in EUR and trade 1 standard lot EUR/USD. One pip = 10 USD ≈ 9.25 EUR. If you set a 30 pip stop-loss, that means a maximum loss of about 277 EUR. Always calculate this before taking a position.