Finance Tools
Pips in Plain Terms
A pip is the unit a currency price moves in. For most pairs it is the fourth decimal place, and for yen pairs the second. Knowing what one pip is worth in your own currency tells you how much a move against you will cost.
When the Numbers Change
If your account currency is not the quote currency of the pair, pip value moves with the exchange rate. Recalculate when the market has moved a lot rather than reusing an old figure.
Choosing a Lot Size
Start from the amount you are prepared to lose and the number of pips to your stop. Divide one by the other to get the pip value you can afford, then pick the lot size that matches it.
Check With Your Broker
Platforms may quote five-decimal prices and round differently. The calculator gives a close estimate; your broker's platform shows the exact figure for your account.
A Worked Example
On EUR/USD with a USD account, one standard lot moves about $10 per pip, a mini lot about $1 and a micro lot about $0.10. Pairs quoted in other currencies are converted at the current rate, which is why the calculator fetches live prices.
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