What Is a Pip in Forex? Pip Value Calculator + Examples (2026)
A pip is the basic unit of price movement in forex. If you want to control risk and size positions correctly, you must understand pip value.
What is a pip?
A pip is typically the fourth decimal place in most currency pairs. Example: EUR/USD moving from 1.0840 to 1.0841 is 1 pip.
Pipettes (fractional pips)
Many brokers quote an extra decimal place called a pipette. A move from 1.08401 to 1.08402 is 0.1 pip.
Why pip value matters
Pip value determines how much you gain or lose per pip. It connects your stop loss size to the amount of money you risk.
Pip value formula
Pip value = (One pip / Exchange rate) x Lot size
For most USD-quoted pairs (EUR/USD, GBP/USD), one pip is 0.0001. For JPY pairs, one pip is 0.01.
Examples
EUR/USD standard lot
- Lot size: 100,000
- Pip: 0.0001
- Pip value = 0.0001 x 100,000 = $10 per pip
GBP/USD mini lot
- Lot size: 10,000
- Pip value = 0.0001 x 10,000 = $1 per pip
USD/JPY standard lot
- Lot size: 100,000
- Pip: 0.01
- Pip value = (0.01 / 150.00) x 100,000 = $6.67 per pip (approx)
Non-USD quote pairs
If your account is in USD and the quote currency is not USD (EUR/GBP), calculate pip value in the quote currency and convert to USD using the current exchange rate.
Quick pip value calculator steps
- Identify the pair and pip size.
- Multiply pip size by lot size.
- If needed, convert to your account currency.
- Multiply pip value by your stop loss in pips to get total risk.
Using pip value for position sizing
If you risk $50 with a 25 pip stop, you need a pip value of $2 per pip. That is a 0.2 standard lot or 2 mini lots on EUR/USD.
Common mistakes
- Using the wrong pip size for JPY pairs
- Forgetting currency conversion
- Ignoring spread costs in very small targets
Next Steps
- Use the Risk Calculator - Calculate position size instantly
- Read Risk Management Guide - Protect your capital
- Position Sizing Guide - Build a consistent risk model
About the Author: Pip Campus Education Team - Simplifying trading math for retail traders.
Related Articles: