Pip Value
How much one pip of movement is worth in your account currency, given your position size.
Also called: value per pip · dollar per pip
In plain language
Pip value converts price movement into money. On a standard lot of 100,000 units with the US dollar as the quote currency, one pip is worth $10.
It scales linearly with size: a mini lot (10,000 units) is $1 per pip, a micro lot (1,000 units) is $0.10 per pip.
When the quote currency is not your account currency, the pip value floats with the exchange rate and must be converted.
The formula
Pip Value
(Pip Size ÷ Exchange Rate) × Lot Size
- Pip Size
- 0.0001 for most pairs, 0.01 for yen pairs
- Lot Size
- Units of the base currency in the position
Change the numbers
This is the concept as a working tool. Edit any field and watch what moves — that relationship is the thing worth remembering.
- Pip Size
- 0.0001
- Value Per Pip
- $10
- Risk At Your Stop
- $200
Most pairs use four decimals
20 pips from entry
Pip value is the forex version of risk per share. Divide your risk budget by 20 pips × $10 and you have your lot size. These figures assume the pair is quoted in your account currency; on other pairs the value floats with the exchange rate.
Size the trade around this riskWhy it matters
Pip value is the forex equivalent of risk per share. Your risk budget divided by (stop in pips × pip value) is your position size.
Common mistakes
- Assuming $10 per pip on every pair regardless of quote currency.
- Ignoring exchange-rate drift on pairs where the quote currency is not your account currency.
Put it to work
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
The standard smallest price increment in a currency pair — usually 0.0001.
The standardized unit of trade size in forex.
The amount of an asset you buy or sell in a single trade.
The gap between your entry and your stop loss — your risk on a single unit.
Two currencies quoted against each other, showing how much of one buys the other.