Pick an instrument and a trade size and you get the value of one pip in your account currency straight away, with the fractional pip (pipette) beside it. Every figure comes from the numbers on screen, with no connection to a live price feed.
What a pip is and why it exists
A pip is a standardised unit of price change, and it exists for one practical reason: it lets you compare instruments whose prices are on completely different scales. Saying that one pair moved 0.0007 and another moved 0.07 tells you nothing about which moved more in trading terms; saying both moved seventy pips puts them on a single scale. On most pairs the pip sits at the fourth decimal place, and on yen pairs at the second — a purely historical consequence of the yen relative size against other currencies.
Pip versus pipette — the biggest trap
Most platforms now quote five decimals instead of four, and three instead of two on yen pairs. That extra digit is not a pip: it is a fractional pip, or pipette, and it equals one tenth of a pip. The trap runs in both directions. Enter 0.00001 in the pip size field and your result is ten times too small; size a position from that result and you open a trade ten times larger than you intended. That is why this calculator always shows both figures side by side and raises an explicit warning when the value you entered is a pipette.
How the formula is built, step by step
The formula is two steps and no more. Step one: pip size times contract size times the number of lots, which gives the pip value in the quote currency — the second currency in the pair. Step two: a single multiplication by the conversion rate moves that figure into your account currency. Note that the instrument own price never enters the formula; only the rate that converts the quote currency into your account currency does. That is why pip value is constant when the two currencies are the same.
Worked example: EUR/USD on a dollar account
Take one standard lot of EUR/USD on a dollar account. Pip size is 0.0001, contract size is 100,000 units and the lot count is 1.00, so 0.0001 × 100,000 × 1.00 = 10.00 dollars. The quote currency here is the dollar, which is also the account currency, so the conversion rate is 1.00000 and step two changes nothing. The answer is ten dollars per pip, and a single pipette is worth one dollar. This is the reference figure most traders memorise, and it is correct for this case specifically rather than for every case.
Worked example: USD/JPY, where conversion is not obvious
Now take one standard lot of USD/JPY on the same dollar account. Pip size here is 0.01 rather than 0.0001, so step one gives 0.01 × 100,000 × 1.00 = 1,000 yen. That figure is in yen, not dollars, which is the part most people miss. At a conversion rate of 0.00633 dollars per yen the result becomes 6.33 dollars per pip. Note that it is not ten dollars: the assumption that every standard lot is worth ten dollars a pip only holds when the quote currency is your account currency.
Worked example: a cross pair, EUR/GBP
On EUR/GBP with one standard lot, step one gives 0.0001 × 100,000 × 1.00 = 10.00 pounds sterling. The quote currency here is the pound, and for a dollar account at a rate of 1.27000 the result becomes 12.70 dollars. The lesson is that conversion does not always reduce the figure: in the yen example it took 1,000 down to 6.33, and here it takes 10 up to 12.70. The direction depends entirely on the quote currency strength against your account currency.
Gold and JPY pairs — where the rule breaks
Yen pairs measure a pip at the second decimal, which is well documented. Gold is harder: we found no acceptable reference source that publishes a pip size for gold, because regulated brokers publish its specification as a contract size plus a value per full point rather than as a decimal place. We observed three different contract sizes at regulated firms: one ounce, ten ounces and one hundred ounces. Both fields therefore stay editable at all times, and a notice appears whenever you select a metal.
From pip value to position size
Pip value on its own does not settle a decision. It becomes useful when you multiply it by your stop distance in pips, which gives the amount you actually lose if the stop is hit. Invert that equation and you get position size: the amount you accept losing, divided by the stop distance multiplied by the pip value per lot. And if you are measuring the distance between two technical levels, you can work that distance out with another tool and convert it into money here. You can also measure the distance between two levels in pips.
Common mistakes
Four mistakes recur more than any others. The first is entering a pipette instead of a pip, which is the most common and costs you a factor of ten. The second is leaving the conversion rate at 1 on a pair whose second currency is not your account currency, so the answer comes out in a different currency without the user noticing. The third is assuming gold has a forex-style contract size. The fourth is confusing position size in units with position size in lots, an error whose margin is the entire contract size.
Frequently asked questions
What is the difference between a pip and a pipette, and why is my result one tenth of what I expected?
A pip is the fourth decimal on most pairs; a pipette is the fifth decimal and equals one tenth of a pip. Most brokers now quote five decimals, so traders read the last digit as the pip when it is actually a tenth of one. Entering 0.00001 instead of 0.0001 in the pip size field returns exactly one tenth of the correct value.
Why does the calculator ask me for a conversion rate instead of fetching one?
Because this tool is built to run without any live price feed. When your account currency differs from the pair quote currency a conversion factor is required, and we chose to let you set it. The benefit is that you can model a hypothetical rate or review an old trade at the rate that applied then — something auto-fetching calculators do not allow.
Why do USD/JPY and GBP/JPY show the same pip value for a dollar account?
Pip value depends only on the quote currency and the contract size, not on the base currency. Both pairs are quoted in yen with a 100,000-unit contract, so a pip is 1,000 yen in each, and converting at the same rate gives the same dollar figure. The pairs differ in how far they move per day, not in what a pip is worth.
Why do you not hardcode a pip value for gold?
Because reference sources do not publish one. Regulated brokers publish gold specs as a contract size plus a value per full point, not as a decimal place. We observed three different gold contract sizes at regulated firms: 1 ounce, 10 ounces and 100 ounces. Any fixed number would be wrong for at least two brokers out of four, so both fields stay editable.
Is pip value fixed for the life of a trade?
It is fixed when your account currency is the pair quote currency, because no price enters the formula in that case. When the two differ, pip value moves with the conversion rate and therefore changes during the trade itself. That is precisely why the rate is an explicit field you can adjust to see the difference.
How do I use pip value to size a trade?
Pip value is the bridge between your stop distance and the amount you are willing to lose. If you accept a fixed loss and your stop sits a known number of pips away, the position size equals that amount divided by the stop in pips multiplied by the pip value per lot. Our position size calculator performs this step end to end.