Pip Value Explained: Currency Conversion and Position Sizing
Originally published 2025-05-27. Translation and editorial review: 14 October 2026. Market figures refer to the original reporting period.
What is Pip Value? Why professional traders need to know
A pip is a small price movement, but its monetary value determines the gain or loss on a position. In forex, even a one-pip move changes account value according to position size.
What is Pip & Pipette?
Pip short for "Percentage in Point" is a measure of the smallest price change in most currency pairs = 0.0001 (e.g. EURUSD moves from 1.1000 → 1.1001 = 1 pip move).
Pipette = 0.1 pip → Used in platforms that display 5 decimal places, e.g. 1.10005.
What is Pip Value?
Pip Value is the “monetary value” of a movement of 1 pip per lot size (lot) you open.
Pip value in quote currency = pip size × units of base currency. Convert that value into the account currency using the correct exchange-rate direction.
But for Major Pairs with USD on the right (such as EURUSD, GBPUSD, AUDUSD), a simple formula can be used:
For a 100,000-unit standard forex lot and a USD quote currency: pip value = lots × USD 10 per pip.
We will look at quote currency as the main basis for finding Pip Value.
Professional description:
position | is called | Meaning |
front (left) | Base Currency | Base currency used for comparison, usually 1 unit. |
rear (right) | Quote Currency | The currency in which one unit of the base currency is priced. |
Quote Currency
is the latter currency in a currency pair, such as:
currency pair | Base Currency | Quote Currency |
EURUSD | EUR | USD |
USDJPY | USD | JPY |
GBPCHF | GBP | CHF |
General formula (non-USD pairs as quote)
Formula for calculating by pair.
1. USDJPY
Pip Value = (0.01 × 100,000 ÷ Current Price of USDJPY) × Number of Lots
📌 Example: USDJPY = 110.00 →Pip Value = (0.01 × 100,000 / 110.00) × 1.00 ≈ 9.09 USD
2. USDCAD
Pip Value = (0.0001 × 100,000 ÷ Current Price of USDCAD) × Number of Lots
📌 For example: USDCAD = 1.2650 →Pip Value = (0.0001 × 100,000 / 1.2650) × 1.00 ≈ 7.91 USD
3. USDCHF
Pip Value = (0.0001 × 100,000 ÷ Current Price of USDCHF) × Number of Lots
📌 For example: USDCHF = 0.9150 →Pip Value ≈ (0.0001 × 100,000 / 0.9150) × 1.00 ≈ 10.93 USD
4. EURGBP
EURGBP: USD pip value = 0.0001 × 100,000 × GBPUSD × lots.
Example: GBPUSD = 1.2500 USD per GBP. A one-standard-lot EURGBP position has a pip value of GBP 10 × 1.2500 = USD 12.50.
5.GBPNZD
GBPNZD: USD pip value = 0.0001 × 100,000 × NZDUSD × lots.
Example: NZDUSD = 0.6000 USD per NZD. For one standard lot, NZD 10 × 0.6000 = USD 6.00 per pip.
6. GBPAUD
GBPAUD: USD pip value = 0.0001 × 100,000 × AUDUSD × lots.
Example: AUDUSD = 0.7000 USD per AUD. For one standard lot, AUD 10 × 0.7000 = USD 7.00 per pip.
Important Summary:
Pip Value based on quote currency (right)
If the account currency is USD, convert a non-USD pip value into USD. Accounts in other currencies require conversion into their own account currency.
Trade with a USD account → Always use an accurate conversion formula before calculating Position Size.
Why do you need to know Pip Value?
✅ Used to calculate Position Size accurately.
✅ Control Risk per Trade better.
✅ Plan Take Profit / Stop Loss to suit your capital.
✅ Use in EA systems or automatic trades based on Pips.
Pip Value calculation example
Trade EURUSD size 0.30 Lot→ Pip Value = 0.30 × 10 = 3 USD per pip→ If price moves 25 pips → Profit/Loss = 25 × 3 = 75 USD
❗️Don't miss it! A point that many traders miss about Pip Value.
"Today most MT4/MT5 display prices with 5 decimal places" but the Pip Value formula you use may still be based on the 4 decimal system!
The truth is…
1 pip = 10 pipette, so when the trading program shows 5 positions, such as EURUSD = 1.10005 → if the price moves to 1.10015 = move 1 pip (10 pipette)
⚠️ Common errors
Calculate Position Size using full Pip Value of 1 pip.
even though the Stop Loss entered in the system is in pipette units (such as 150 = 15 pips).
✅ Solution: Adjust it correctly like a professional.
When SL/TP is expressed in pipettes, divide pip value by the number of pipettes per pip. Verify the instrument and platform units: some fields use prices, ticks or points.
📌 Example:
Pip Value EURUSD (1 Lot) = 10 USD
but you put Stop Loss = 150 (in system = 15 pip = 150 pipette)
This separate formula must be used to calculate the current Position Size:
Position Size = Risk Money ÷ (Stop Loss × Pipette Value)
Summary:
📌 Pip = 10 Pipettes
📌 If you enter Stop Loss/TP in pipette units → you must divide the Pip Value by 10.
📌 This is a mistake that many traders make. Especially for EA or Script users.
“It's small details like this. that separates amateurs from professionals.”
Pip Value is no small matter.
"Pip isn't small if it controls your profit and loss."
Know and use Pip Value correctly = Trade like a pro.
Use the free FX Position Size calculator on our Financial Tools page to check the calculation with your instrument specifications. www.projectcwf.com
Save this post. Share to friends Then review yourself:
Have you traded every stick knowing the pip value?
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