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What are Pips?
Point in percentage, or pip in short, is a unit of measurement used to express the change in value between two currencies. A pip is usually the last decimal place of a price quote and traders around the world express their profits and losses in the number of pips their position rises or falls.
In addition to the standard pip, most forex brokers also offer ‘fractional pip pricing'. This adds a fifth decimal place, so a fractional pip is one tenth of a pip.
How does the Pip calculator work?
In just a few simple steps, you can calculate the pip value of your trades so that you can manage your risk better.
Choose the deposit currency of your trading account
Select the instrument you’re trading
Enter the volume (lots) you're trading
Click the 'Calculate' button and let our pip value calculator do the hard work for you
Calculating the Pip values
To calculate the value of a pip, the following variables are required: account base currency (account currency), trading instrument (e.g. currency pair) and trading volume (trade size). The following formula is used to calculate pips:
Pip Value = (One Pip / Exchange Rate) * Lot Size
Let's say the pip value for a 0.10 lot of GBP/USD, with a market rate of 1.31580, on a GBP trading account, is currently £0.8225.
Pip Value = (0.0001 / 1.31580) * 10,000
Pip Value = £0.7599
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