Pip Value
The monetary value of a one-pip movement for a specific trade size.
Plain-English Meaning
Pip value tells you exactly how much money you make or lose for every single pip the market moves. The value changes based on how large your trade is (your lot size) and which currency pair you are trading.
Why It Matters
You cannot manage risk without knowing your pip value. If a trade has a 30-pip stop loss, you must know the monetary value of those 30 pips to ensure you are not risking more capital than planned.
Simple Example
If you trade 1 Standard Lot (100,000 units) of EUR/USD, the pip value is typically $10. If the market moves 5 pips, the monetary change is $50.
This educational example uses selected assumptions for reference calculation purposes. Real conditions may vary by broker, exchange, or instrument.
Beginner Mistake
Assuming all currency pairs have the same pip value. A pip on EUR/USD is usually worth a different amount than a pip on USD/JPY or GBP/NZD.
Note: Pip value calculations are reference estimates. Exact values may vary by currency pair, account currency, quote currency, broker settings, conversion rate, and platform rules.