How Do I Calculate Number of Pips in Currency Pairs Moves

To calculate the number of pips that a currency pair moves a trader will use the fourth decimal point in the currency quotes.

The fourth decimal point is known as a pip. Brokers also implement the fifth decimal point which is known as a pipette or a fraction of a pip - 10 pipettes make one pip.

Example: for 4 decimal Points Quote

If EURUSD moves from 1.4500 to 1.4501 then this move is equal to:

1.4501-1.4500 = 0.0001 (1 pip)

The Value of = 0.0001 USD

1 contract = $100,000

The Value of 1 pip for 1 contract = 100,000* 0.0001= $10

1 pip = $10, for 4 Decimal Points Format

4 Points Decimal Currency Quotes Format in MetaTrader 4 - Pips

Example: for 5 Decimal Points Quote in FX Trading

If EURUSD moves from 1.45000 to 1.45001 then this move is equal to:

1.45001-1.45000 = 0.00001 (1/10 pipette)

The Value of = 0.00001 USD

1 contract = $100,000

The Value of 1/10 pipette for 1 contract = 100,000* 0.00001= $1

1/10 pipette = $1, for 5 Decimal Points Format

5 Decimal Points Currency Quotes Format on MT4 - Forex Fraction of Pips

Please Note from the above MT4 screen-shot how the fifth decimal point is shown in a digit much smaller than the other digits, this is to signify that it is a fraction of a pip.