What are pip how do you calculate your value per pip on your profits and losses. I’m gonna talk about that today.So once the pip is the smallest movement in a currency pair, now pip is actually a short form because it actually stands for percentage in points. Exchange rates are total in either two decimal places or four decimal places meaning that one pip is 0.01 of the price one pip is equal to zero point zero zero zero 1 of the price so which are currency pairs that are coated two decimal places and which I’ll concede pairs that are coated at four decimal places so why do you need to know this because you need this to calculate your value per pip later on and why do you need the four because you need that to calculate your profit and also your position size for you to remember it easily so they don’t memorize it one by one currencies with the yen in it would be coated at two decimal places where’s the rest of the currency pairs they will be quoted at four decimal places so if I take dollar yen for example okay because you see again right here in this pair then one pip would be equal to 0.01 so to give you an example how do you calculate the amount of pips so let’s take for example say today the price of dollar yen earlier in the morning it was at about one one 0.294 okay and then right now it is about one one zero point six five eight so if you calculate how many pips did it move from this morning all the way to right now based on this two decimal places one one zero point six five minus one one zero point two nine you realize that I ignore the last number because most empty four platforms they give you and at this number so when you calculate this you will get 36 pips movement well if you go to empty for you use the crosshair function you will get the number 360 that’s actually 360 points but your contents or pips it will be 36 pips but then again if you want to be more specific then you can add in the last number four and eight okay so when I put this in and four you get the D six point four pips so let’s take an example your dollar okay we are near. Take your dollar would be quoted in for the small pieces okay 0.001 so let’s say if you make a sell trick at one point one five seven nine three and then you take your profit at one point one five three six five how many pips did you just harvest the same thing again we ignore the last number because most empty four platforms they would have an extra number the back alleged using a different form different broker so we take one point one five seven nine minus one point one five three six okay we are math 9-6 three then for the trip you put in the last number three and five point true now do your math in mind 610 would be forty two point two pips okay for the two point two pips so before I talk about value per pip for different country pairs you need to understand the number units per lot first once their lot would be hundred thousand units right after that you have one mini lot where your training ten thousand units of the base country well today you have one micro lot we’re trading 1000 units of the base currency and followed by that you have not hundred units of the base currency so to give you an example so when you buy one lot, you’re always buying the base currency so for example if you buy one standard lot of your dollar what you’re doing is that you are buying 100 of Euro with u.s. dollar now that you have known oh these things nice time to calculate the value per pip all right so the formula goes like this depending on the can see pair with us tool of all this what pays us you need to determine what is the decimal place of that currency pair then times that with your tree size where that’s hundred thousand units 10,000 units divide that by the current exchange rate or current market price meaning that this is where you look at a chart and determine okay what price is your dollar at right now what price is dollar yen at right now and here’s the good news nowadays you don’t need to calculate this yourself manually because number one what people are very lazy number two a lot of people are very busy number three a lot of people calculate wrongly when there is an online calculator and it’s there for free you use it when there’s something that’s given to you for free you take it so why don’t you have you this formula for is just for you to double confirm let’s say if you don’t trust the online calculator that some random person gives you or if you’ll know if your computer then you can calculate it manually let’s say when you’re traveling you’re using your phone to trade then you calculate this manually to give you an example .
Hope this will help you calculate Pip value in Forex.