Knowing the “Pip Value” is very important to understand profit, loss and market price movement.

But it is, actually very simple.

Simple Example ①

If you are trading 1 lot which is 100,000 units(USD),

one pip value of EUR/USD is 10 USD.

If the price moves 1 pip from 1.00000 to 1.00010, the difference of the price is 10 USD.

So in this case, you have made 10 USD of profit or loss.

Tip for you

1 lot = 100,000 units
1 pip value = 10 units

The formula to calculate Pip Value

If you like to calculate a Pip Value, you my use the below formula:

Pip Value = (One Pip / Exchange Rate) * Lot Size

and here is an example of using the formula above.

One Pip: 0.0001
Account Base Currency: EUR
Currency Pair: EUR/USD
Exchange Rate: 1.08962 (EUR/USD)
Lot Size: 1 Lot

⇩　⇩　⇩　⇩　⇩

Pip Value = 0.0001 / 1.08962 * 1
Each Pip is worth €9.18

This time, you just had to consider the “exchange rate” because the Account Base Currency and the Traded Currency are calculated in different currencies.

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Are you bothered to calculate the Pip Value by yourself?

Go to XM Official Website, and proceed to “Research & Education”→”Forex Calculator”, where you can get instant results of any calculations.

Use XM’s Forex Calculator