A pip (percentage in point) is the unit traders use to measure how far a currency price has moved.
- For most pairs, one pip is 0.0001 — the fourth decimal place. If EUR/USD moves from 1.1600 to 1.1625, it has moved 25 pips.
- For pairs quoted in Japanese yen, one pip is 0.01 — the second decimal place. If USD/JPY moves from 148.20 to 148.50, it has moved 30 pips.
Many brokers show one extra digit, called a pipette or fractional pip (one tenth of a pip).
Lot sizes
A pip only becomes money once you know your position size. Forex positions are measured in lots:
| Lot | Units of base currency |
|---|---|
| Standard lot | 100,000 |
| Mini lot | 10,000 |
| Micro lot | 1,000 |
How to calculate pip value
The formula has two steps.
1. Pip value in the quote currency
Pip Value = Pip Size × Contract Size × Lot Size
- Pip Size — 0.0001 for most pairs, 0.01 for JPY pairs.
- Contract Size — the units in one standard lot: 100,000 for currency pairs (100 oz for gold, 5,000 oz for silver).
- Lot Size — how many lots you trade: 1 for a standard lot, 0.1 for a mini lot, 0.01 for a micro lot.
For one standard lot of EUR/USD: 0.0001 × 100,000 × 1 = 10 USD.
For a mini lot: 0.0001 × 100,000 × 0.1 = 1 USD.
2. Convert to your account currency
- If your account is in the quote currency (USD for EUR/USD), you are done: $10 per pip.
- If your account is in the base currency, divide by the price. With EUR/USD at 1.25 and a EUR account:
10 ÷ 1.25 = €8 per pip. - Otherwise convert using the relevant exchange rate. For EUR/GBP in a USD account, the pip value is £10, which at GBP/USD 1.27 is $12.70.
Worked example: USD/JPY
One standard lot of USD/JPY at 148.00, USD account:
- Pip value in yen:
0.01 × 100,000 × 1 = 1,000 JPY - In dollars:
1,000 ÷ 148 = $6.76 per pip
Worked example: gold (XAU/USD)
Gold is quoted in US dollars per troy ounce. On this site a gold pip is 0.01 (one cent), and one standard lot is 100 oz.
One standard lot of XAU/USD, USD account:
- Pip value:
0.01 × 100 × 1 = $1 per pip - With a mini lot (0.1):
0.01 × 100 × 0.1 = $0.10 per pip
How many pips did the price move?
Number of Pips = (Exit Price − Entry Price) ÷ Pip Size
- Exit Price − Entry Price — the price distance travelled, in dollars.
- Pip Size — 0.01 for gold on this site.
If gold rises from 4,800.00 to 4,810.00:
- Price distance:
4,810.00 − 4,800.00 = 10.00 - Number of pips:
10.00 ÷ 0.01 = 1,000 pips - Profit on 1 standard lot:
1,000 × $1 = $1,000
A $10 move looks small, but each cent is one pip, so it is 1,000 pips. You can check the money another way: 100 oz × $10 per ounce = $1,000.
Check how your broker defines a gold pip. Some call 0.10 a pip, so the same move is 10.00 ÷ 0.10 = 100 pips and one lot is worth $10 per pip. The money is identical — 100 × $10 = $1,000 — only the pip count changes. Contract sizes can differ between brokers too, so confirm them in your broker’s contract specifications.
Try it
Change the pair, lot size and account currency to see the pip value update.
Why it matters
Pip value is the link between a price move and your profit or loss. A 50-pip move is $50 on a mini lot of EUR/USD — but $500 on a standard lot. Knowing your pip value is the first step to sizing positions so a single loss can never do serious damage to your account.