PIP VALUE BASICS
How is pip value calculated?
Pip value connects a currency pair's contract specification with the position size traded. The same one-pip price move is worth more at a larger lot size and less at a smaller one, so pip value is the link between price movement and money.
01What is a pip in forex trading?
A pip is a standardized unit of price movement used across most forex pairs, typically the fourth decimal place. For pairs quoted with two decimals, such as those involving the Japanese yen, the pip sits at the second decimal instead.
02Why is EUR/USD pip value different from USD/JPY?
Pip size and quote precision are not identical across pairs, and each pair has its own profit currency. Those differences change the resulting pip value even when the lot size and contract size look similar at first glance.
03How does pip value connect to position sizing and risk?
Multiplying pip value by a stop-loss distance in pips gives the monetary risk of a trade. The MT5 Position Size Calculator works in the other direction. It starts from your chosen risk and stop distance to calculate a lot size.