Basics

Pip Value

Pip value is the monetary worth of a single pip movement for a given trade size and currency pair. It depends on three factors: the lot size, the currency pair, and the account currency. For USD-quoted pairs (like EUR/USD), pip value on a standard lot is always $10. For non-USD pairs, pip value fluctuates with exchange rates. Knowing your pip value is essential for calculating risk, position size, and potential profit or loss.

Example

On EUR/USD with a 1 standard lot position, 1 pip = $10. On a 0.10 lot (mini lot), 1 pip = $1.00. On a 0.01 lot (micro lot), 1 pip = $0.10. If your stop loss is 30 pips and you trade 0.50 lots, your risk is 30 × $5.00 = $150.