How to Calculate Forex Pip Value

Understanding pip value calculation is crucial for successful forex trading. This guide will show you exactly how to calculate pip values for any currency pair.

What is a Pip in Forex Trading?

A pip (percentage in point) is the smallest price move that a currency pair can make. For most currency pairs, a pip is the fourth decimal place (0.0001). The main exception is JPY pairs, where a pip is the second decimal place.

Pip Value Formula

The basic formula for calculating pip value is:

Pip Value = (Pip Size × Lot Size × Units per Lot) ÷ Current Exchange Rate

Step-by-Step Calculation Example

  1. For EUR/USD trading 1 standard lot (100,000 units):
    • Pip size: 0.0001
    • Lot size: 1
    • Units: 100,000
    • If EUR/USD = 1.2000
    • Pip Value = (0.0001 × 1 × 100,000) ÷ 1.2000 = $8.33 per pip

Using Our Pip Value Calculator

Our forex calculator automatically computes pip values for you. Simply:

  1. Select your currency pair
  2. Enter your lot size
  3. The calculator will show you the pip value in your account currency
Try Our Calculator Now

Common Pip Value Questions

Pip values vary because of differences in exchange rates and the position of the quote currency relative to your account currency.