Trade Forex Trading

How Do You Read Pips for Standard Account?

A pip is the smallest change in the price of a forex pair: the pip is used to figure out how much money you make or lose when trading in the online forex market.

How to Interpret/Analyze Forex Pips When Standard Lots

Within a forex exchange rate quotation, a pip is represented by the movement in the fourth decimal place: for example, if EUR/USD moves from 1.3000 to 1.3001, this constitutes a one-pip change.

How much a currency pair moves in fx is measured in pips. If you trade one Standard lot, each pip move is worth $10, as shown in the examples below.

How to Read Pip value in a Standard Trading Account

For a standard account, figure profit or loss by counting pips in a forex pair's shift. Multiply pips by $10. That's the pip value for standard lots.

One pip marks the smallest move in a forex pair. For standard lots, that equals $10. It comes from 100,000 units times 0.0001.

How to Calculate Forex Profit and Loss in a Standard Account

Example 1: if EUR USD currency pair heads from 1.3000 to 1.3001 - this is equivalent to 1 pip - one pip is the 4th decimal place in the fx quote.

The profit or loss will be:

1.3001 - 1.3000 = 1 pip

1 pip* $10 per 1 pip = $10

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

If the trade goes your way, you gain $10. If it goes against you, you lose $10.

Here's an example: if the EURUSD goes from 1.3000 to 1.3010, that's like 10 pips: 1 pip is the fourth number after the decimal in the fx currency quote.

The profit or loss will be:

1.3010 - 1.3000 = 10 pips

Thus, a 10-pip fluctuation on a Standard lot equates in value to $100 (10 pips multiplied by $10 per pip equals $100).

If the trade transaction heads in direction of the trade transaction, the trader will make and earn a profit of $100 dollars. If the trade transaction moves against the direction of the trade transaction, the trader will make a loss of $100.

Example 3: for Example, if EURUSD goes from 1.3000 to 1.3025, that is the same as 25 pips: 1 pip is the 4th number after the decimal in the fx currency price.

The profit or loss will be:

1.3025 - 1.3000 = 25 pips

25 pip* $10 per pip = $250

Therefore, 25 pips move for Standard lot is equal to $250 dollars

Should the trade execution proceed in the intended direction of the transaction, the outcome will be a profit of two hundred fifty dollars. Conversely, if the transaction moves contrary to the intended trajectory, a loss amounting to two hundred fifty dollars will be incurred.

How to Compute the Standard Account Pip Size along with Profit & Loss in a Standard Trading Account.

Study More Courses & Guides:

Forex Broker