Pip Value Calculator

What Is Pip Value

Pip value is the measurement unit that expresses the fluctuations of value between two currencies in a forex trade. It is a value that refers to the loss or gain of the currencies. Pip value varies slightly between currencies.

However, for major currencies, the pip value is typically the fourth figure after the decimal. On the other hand, some currency’s pip value, such as the Japanese Yen, goes out to two decimal places.

Why you should use the Pip Value Calculator

There are many good reasons why you should use a pip value calculator. They include:

• A pip value calculator is the quickest way to determine the value of a pip. In addition, this calculator also gives you the precise value of the pip of your trading currency, which is critical in determining the risk.
• Using a pip value calculator eliminates the need to use forex brokers’ services, which can be quite expensive.
• You should also use a pip value calculator, so you do not have to do all the manual calculations.

Calculation of pip value

Here are the steps to calculate the value of a pip

• Divide one pip by the current exchange rate.
• Multiply this figure with the account base currency, also called lot size

Or, Pip value = 1Pip/ Current Exchange Rate * Lot Size

Example 1

1 Pip – 0.0001

Instrument / currency pair – EUR/USD

Current exchange rate – 1.12181

Base/deposit currency – EUR

Trade/Lot Size – 10,000

Pip value = 0.0001/1.12181*10,000= €8.91417

This means if you traded 10,000 units of EUR/USD, one pip change in relation to the exchange rate is approximately worth 8.91 EUR in value.

Example 2

1 Pip – 0.0001

Instrument / currency pair – GBP/JPY

Current exchange rate – 132.259

Base/deposit currency – GBP

Trade/Lot Size – 10,000

Pip value = 0.0001/132.259*10,000= £7.56092

This means if you traded 10,000 units of GBP/JPY, one pip change in relation to the exchange rate is approximately worth 7.56 GBP in value.