Optimize your forex trading strategy with our comprehensive set of forex tools. From currency converters to pip calculators, stay ahead of the market with our collection of free forex trading tools. Start trading smarter today.
A forex pip denotes the smallest price adjustment that a currency pair can undergo, excluding fractional pips or 'pipettes'.
For most currency pairs, a single pip represents 0.0001; however, in currency pairs involving the Japanese Yen like USD/JPY, one pip is equivalent to 0.01. When dealing with precious metals like Gold and Silver, one pip translates to 0.01.
For example, when the EUR/USD rises from 1.0925 to 1.0926, the change amounts to 1 pip. In the context of 5-digit pricing, if the EUR/USD shifts from 1.09255 to 1.09260, the shift would indicate half a pip.
Currency Pair: Traders have the freedom to choose from a diverse array of trading options, encompassing major forex crosses, minor pairs, exotic pairs, prominent cryptocurrencies (such as ADA, BTC, ETH, LTC, and XRP), as well as various commodities like Gold, Silver, and Oil. For illustration, let's consider the EUR/USD pair.
Position Size: In the context of forex pairs, a single lot comprises 100,000 units. However, units per lot can vary for non-forex pairs. This field also allows for calculating the pip value based on either lots traded or units traded. For our example, let's select a trade volume of 10,000 currency units (0.10 mini-lot).
Account Currency: Pip values differ for each FX pair and cryptocurrency combination. These values are subject to fluctuations in current market/exchange rates. By selecting an account currency in this section, accurate calculation of the pip value for the chosen instrument in the trader's account base currency (ranging from AUD to ZAR) becomes feasible. Let's choose EUR as our account currency.
Upon clicking the "Calculate" button,
the outcomes will be unveiled: The pip calculator utilizes a live market price feed with the prevailing interbank rate (presented in a 5-digit format) and will showcase the current pip value based on the selected account base currency (in our example, EUR).
Result , the pip value for a 0.10 lot of EUR/USD, with the prevailing market rate of 1.21580, within an EUR-denominated trading account, currently stands at €0.8225.
Traders should take note that pip values may vary for trading accounts denominated in alternative base currencies such as GBP or AUD. This discrepancy hinges on the prevailing market rate for pairs like GBP/USD or AUD/USD. The subsequent conversion formula is employed to determine the pip value in other currencies.
The result would be:
