Forex Pip Value Calculator for Traders

A key precision tool for traders is the forex pip value calculator— an essential instrument that simplifies the calculation of the pip value for various currency pairs. It can be described as a trader’s compass that guides them through international currency exchange by translating abstract price changes to concrete monetary values. 

At WR Trading, we help traders understand that a forex pip value calculator can be the difference between a profitable trade and a costly mistake.

Specifications Of The Forex Pip Value Calculator

A pip calculator should have certain features that help traders make accurate calculations. That’s why at WR Trading, we recommend using a calculator with the following specifications: 

• Account Currency: This is the base currency of a trader’s account, that is, the currency the trader holds. A good pip value calculator like ours automatically converts the pip value to the account currency if the pair being traded does not include the base currency of the trader’s account.
• Currency Pair: Currency pairs are vital when calculating the pip value. Therefore, a good calculator should be able to provide for all major or minor currency pairs. Examples of these currency pairs include EUR/USD and GBP/USD.
• Ask Price: The ask price underpins pip value: it determines the conversion rate for each pip move, ensuring the calculator accurately reflects potential profit or loss in your account currency. 
• Position Size (Units): This is a very important factor in pip value calculation. For example, EUR/USD may use 100,000 units as the standard unit of measurement for the base currency. 

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• Best for FX Traders
• Multiple Platforms available
• Regulated in New Zealand
• Fast deposits & withdrawals
• Fast sign up process

Spreads

0,0 Pips

Commissions

$2 per 1 lot traded

Leverage

Maximum 1:500

Platforms

MT4, MT5, TradingView, cTrader

What Are Pips? 

A pip (percentage in point) is a unit of measurement used to describe the change in the value of a currency pair in forex trading. It represents the smallest price movement in the exchange rate of a currency pair.  Usually, a pip is the fourth decimal place (the fourth number after the decimal) in the price of most currency pairs except for the pair involving the Japanese yen, where it is the second decimal place. 

For example, if the EUR/USD exchange rate moves from 1.1050 to 1.1051, that’s a one-pip movement, and if the USD/JPY moves from 1.10 to 1.11, that is also a one-pip movement. 

While this movement might be minuscule, it may determine if a trader makes a profit or loss. It translates to significant financial implications for any trader.

How Does The Forex Pip Value Calculator Work?

A Forex Pip Value Calculator works by calculating the monetary value of a single pip for a specific trade. It works by accurately determining the monetary value of a pip movement for a specific currency pair. It uses a complex algorithm to convert pip movements into actual monetary values.

With our pip calculator, you simply have to enter the following values into the calculator:

• Currency pair
• Ask price
• Position size 
• Account currency 

The calculator will then calculate the value of a pip in the currency you want to trade in. It determines the monetary value of a single pip movement in your trade by calculating how much money you gain or lose for each pip change. This calculation is based on your position size and the currency pair you are trading.

The calculator works by considering the Currency pair, the currency of the trading account, and trade size, that is, the number of lots or units.

How To Calculate The Pip Value Manually

Understandably, the Forex Pip Value Calculator simplifies the process. But, it is also beneficial to understand how to calculate pip values manually. Here’s a step-by-step method to calculate pip value:

• Identify the currency pair
• Recognise where the pip is located, depending on the currency pair
• Determine the lot size you are trading 
• Calculate the base currency pip value using this formula: 

One Pip ÷ currency exchange rate × Lot size.

For Example, if you are trading 1 standard lot of EUR/USD (100,000) at 1.1050 and the pip is 0.0001. The pip value would be: 

• Pip value = 0.0001 ÷ 1.1050 × 100,000
• Pip value = $9.05. 

Conclusion

Our Forex Pip Value Calculator is more than just an analytic tool. It is a major risk management and strategic trading tool. At WR Trading, we help traders understand how pip values work and how to calculate them. We also equip them with knowledge on how to make informed decisions and manage their capital effectively. Try out our pip value calculator.