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How to Calculate and Interpret Pips Value When Standard Lots Explained

How to Calculate and Interpret Pips Value Movement When Standard Lots

In trading, a pip is the fourth decimal place in a forex quote. So if EUR/USD moves from 1.3000 to 1.3001, that's a 1 pip move.

In forex, pip changes for currency pairs use pips. For one standard lot, each pip equals $10, as the images below show.

How to Calculate the Pip value in a Standard Trade Account

For standard lots, find the pip value by counting pips in a forex pair's move. Multiply that by $1. Standard contracts give $10 per pip.

One pip represents the smallest movement in currency pairs used during forex trading.

1 pip move when trading Standard lots/contracts is equivalent to $10 (100,000 units of currency * 0.0001 = $10)

How to Calculate the Pip Value Movement

Forex Example 1: if EURUSD changes from 1.3000 to 1.3001 this equals one pip - one pip is the number in the 4th spot after the decimal.

The pip size movement will be:

1.3001 - 1.3000 = 1 pip

1 pip* $10 per 1 pip = $10

Hence, 1 pip value movement for Standard lot is equal to $10 dollars

FX Example 2: For example, if EURUSD changes from 1.3000 to 1.3020, that is the same as 20 pips, and one pip is the 4th number after the decimal in the forex price.

The pip value movement will be:

1.3020 - 1.3000 = 20 pips

20 pip* $10 per pip = $200

Consequently, a 20-pip price fluctuation when dealing with a Standard lot translates to a monetary value equivalent to $200.

FX Example 3: for Example if EURUSD moves from 1.3000 to 1.3030 this is equal to 30 pips - 1 pip is the fourth decimal place in the currency quote.

The pip size movement will be:

1.3030 - 1.3000 = 30 pips

30 pip* $10 per pip = $300

Consequently, a movement of 100 pips for a Standard lot equates to a value of $1000.

How to calculate Pip Value Movement When Standard Lots.

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