How Do I Calculate Pips in Forex Trading? - What is PIPS Definition and Examples?

The currency exchange rate of currency pairs in forex trading is calculated in pips.

What is PIPS - Pips is Price Interest Points

The smallest movement for currency pairs is the forex pip.

The value of 1 pip when trading forex is determined by calculating the value of the forex lot being traded multiplied by 1 pip.

The pip is the fourth decimal point in the currency exchange rate quote.

For example in EURUSD currency quote 1.2001, the fourth decimal point is know as the PIP.

Therefore the pip is equal to 0.0001

To Calculate the value of 1 pip for standard lot, mini lot and micro lot

Standard lot - 100,000 units of currency*0.0001 = $10

Profit per pip for standard lot is = $10

Mini lot - 10,000 units of currency*0.0001 = $1

Profit per pip for mini lot is = $1

Micro lot - 1,000 units of currency*0.0001 = $0.1

Profit per pip for micro lot is = $0.1

How to Calculate the value of 1 pip for standard lot, mini lot and micro lot