A pip is a unit of measurement in trading to express the change in value between two currencies. If the EUR/USD moves from 1.1050 to 1.1051, that .0001 USD rise in value is ONE PIP.
A PIP is what defines your profit or loss, the value of the pip is determined by the ‘volume’ or contract size you opened.
Currency Pair
Account Base Currency
Volume in Lots
Account Type
| Current Conversion Price (EURUSD) |
0:00 |
| Pip Value (EUR) |
0:00Account Base Currency |
| Pip Value (USD) |
0:00Converted Currency |
| Currency Pair: | EUR/USD | Account Base Currency: | EUR |
|---|---|---|---|
| Volume in Lots: | 5 | Account Type: | Standard |
| Results | |||
| Current Conversion Price (EUR/USD) | 0.97148 | ||
| Pip Value (EUR) | |||
| Account Base Currency | 51.47 | ||
| Pip Value (USD) | |||
| Converted Currency | 50.00 | ||
WHAT ARE PIPS?Each currency has a separate value from others, so it is necessary to calculate the value of the pip for each currency pair. We also want a constant so we will assume that we want to convert everything to US Dollars.
On all the majors, for a position of 1 lot (100.000 of the base currency) each pip is worth $10)
Example:
EUR/USD
Open position: Buy 1 lot (100,000) EUR/USD AT 1.29530
Close position: Sell 1 lot (100.000) EUR/USD at 1.29930
1.29930 - 1.29530 = 40 pips
40 pips x $10 = $400 profit
