Pips Calculator
What are pips?
Technically an acronym for “Percentage in Point” or “Price Interest Point”, Pips are basically just the smallest change in value between two currencies in forex trading.
For most currency pairs one pip is equal to 0.0001. There are, however, some currency pairs such as the Japanese yen (JPY) that have a different size, with the JPY pip typically equalling 0.01 because the yen is always quoted with two decimal places.
For example, if the EUR/USD exchange rate moves from 1.2000 to 1.2001, it has moved by 1 pip, whereas if the USD/JPY exchange rate moves from 110.00 to 110.01, it has also moved by only 1 pip.
Recently as forex pairs have become available in even smaller fractions, the “Pipette” has emerged. Established by some Forex brokers, Pipettes follow the same rules as pips, representing a specific fractional change in the conversion.
Taking the USD/JPY conversion, if the pip in 110.012 is the 000.01 value, then the Pipette would be the 000.002 value.
What is pip value?
Each pip value is equal to the monetary value of a pip movement in a specific forex trade, meaning the value can change entirely depending both on what the change in monetary value is, as well as what forex pair is being traded.
This helps traders determine the potential profit or loss for a given trade based on the size of the position and the number of pips it moves.
In case you need it, here is the formula for calculating pip value:
Pip Value = (Pip in decimal places * Trade Size) / Exchange Rate
To see how this works in real life, imagine you’re trading EUR/USD and the exchange rate is 1.2000. If you’re trading 1 standard lot (100,000 units), where one pip is worth $10, then the calculation for your specific pip value would be:
(0.0001 * 100,000) / 1.2000 = $8.33
How does the pip calculator work?
Manually working out your pip value can be tedious the first time, yet alone having to constantly calculate different pip sizes for different forex trading pairs everyday.
Luckily, with our pip calculator you can calculation your pip value quickly and easily.
Saving you time and effort, all you need to do is enter the relevant data into the pip calculator and it will instantly tell you your pip value size.
This is is useful for quickly determine the pip value, position size, or potential profit/loss for a trade.