Pip value: meaning in forex and gold trading
Pip value is the money one pip is worth for a given position size, in the quote currency or converted to your account currency.
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Pip value: Pip value is the money one pip is worth for a given position size, in the quote currency or converted to your account currency.
How pip value is calculated
Pip value is position size in units × pip size, which gives a figure in the quote currency. For EUR/USD, one standard lot is 100,000 × 0.0001 = 10 dollars per pip. If your account is in pounds or euros, you convert that figure at the current rate.
When the dollar is the base currency, as in USD/JPY or USD/CAD, the pip value starts in yen or Canadian dollars. One standard lot of USD/JPY is 100,000 × 0.01 = 1,000 yen per pip, which at a rate of 156 is about 6.41 dollars.
Why it changes
Pip value is fixed only when the quote currency is the same as your account currency. Otherwise it moves a little with exchange rates. That is why a calculator that uses current rates, such as the pip value calculator, is more reliable than memorised figures.
Worked example
A GBP account trades 0.50 lots of USD/JPY. One pip is 500 yen. At USD/JPY 156 that is about 3.21 dollars, and at GBP/USD 1.34 about £2.39 per pip. A 30 pip stop therefore risks about £72.
Common mistakes
- Using 10 dollars per pip on every pair.
- Forgetting to convert into the account currency.
If you follow trade signals, for example the gold signals or EUR/USD signals, understanding this term helps you size and manage each trade yourself. The free Forexuro Telegram channel shares daily market updates where these ideas are used in practice.
Related terms
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Frequently asked questions
What is the pip value of one lot of EUR/USD?
About 10 dollars per pip, because the pair is quoted in dollars.
Does pip value change?
Yes, when the quote currency differs from your account currency, because the conversion rate moves.
Education only, not financial advice. Trading forex, gold and CFDs carries a high risk of losing money, and leverage magnifies both gains and losses. Past performance is not a reliable guide to future results. Read our risk disclosure.