The quiet assumption that breaks position sizing
Almost every sizing formula you will read assumes $10 a pip. That is exactly right for EUR/USD, GBP/USD and the other dollar-quoted majors, and wrong for everything else. On GBP/JPY or EUR/GBP the real figure can be 20-30% higher, which means a trader using the default is quietly running 20-30% more risk than their plan says.
Three cases, one rule
- Quote currency is USD (EUR/USD, AUD/USD): one pip on a standard lot is a flat $10, whatever the price does.
- Base currency is USD (USD/JPY, USD/CHF): pip value is 10 divided by the current rate, so it moves as the pair moves.
- Neither is USD (EUR/GBP, GBP/JPY): the pip is worth pip size x units in the quote currency, converted to yours at the live cross rate.
Pips, pipettes and gold
If your platform shows five decimals on EUR/USD, the last digit is a pipette - one tenth of a pip. A 15-pipette stop is 1.5 pips, not 15, and confusing the two is one of the most common beginner sizing errors. Metals are their own convention: gold trades a 100-ounce contract where platforms disagree on what counts as a pip, so always confirm in the terminal before sizing.
Now turn it into a lot size
Pip value is an input, not an answer. Feed it into the position size calculator to get the lots your risk budget allows, and price the trade properly in the risk and reward planner. When you are ready to trade it, our forex broker reviews list the spreads we measured ourselves.
Pip value at a glance, standard lot
| Pair | Pip size | Value per pip | Moves with price? |
|---|---|---|---|
| EUR/USD, GBP/USD, AUD/USD | 0.0001 | $10.00 exactly | No |
| USD/JPY | 0.01 | 1,000 JPY ÷ rate | Yes |
| USD/CHF, USD/CAD | 0.0001 | $10 ÷ rate | Yes |
| EUR/GBP, GBP/JPY | 0.0001 / 0.01 | converted cross | Yes |
Only the first row is the clean $10 everyone quotes. On a cross like GBP/JPY the real figure can sit meaningfully above that, which means a trader sizing on the default assumption is running more risk on exactly the pairs that move most.
Pips, points and pipettes
Three words, two meanings, endless confusion. A pip is the standard fourth-decimal move. A pipette or point on a five-decimal platform is one tenth of that. MetaTrader reports profit in points, so a "150 point" result is 15 pips. Sizing a position after mixing these up produces an error of exactly ten times, in either direction, which is the single most expensive unit mistake in retail forex.
Turning pip value into a position
Pip value is an input, not an answer. The chain is: stop distance in pips, times pip value, times lots, equals money at risk. Fix the money at risk at a small percentage of the account and the lot size falls out of the arithmetic. That is what the position size calculator does, and it is the one habit that separates traders who survive a losing streak from those who do not.
Frequently asked
What is a pip worth?
On a standard lot (100,000 units) of a pair quoted in US dollars, one pip is exactly $10 and does not move with price. On a pair quoted in another currency it is pip size × units in that currency, then converted to your account currency at the live rate. This calculator does that conversion for you.
What is a pip?
The smallest standard price move for a currency pair: the fourth decimal on most pairs (0.0001) and the second on anything quoted in Japanese yen (0.01). Many brokers quote an extra digit called a pipette, worth one tenth of a pip, so a move from 1.08500 to 1.08510 is one pipette, not one pip.
How is pip value different for JPY pairs?
Yen pairs are quoted to two decimals, so a pip is 0.01 rather than 0.0001. On a standard lot that is 1,000 yen per pip, converted to your account currency at the current rate. Unlike a USD-quoted pair, the dollar value of a yen-pair pip changes as the exchange rate moves.
Why does pip value matter for position sizing?
Because real risk is stop distance × pip value × lots. If you assume $10 a pip on a pair where it is actually $13, every trade is 30% larger than intended and a losing streak costs far more than the plan allowed. Get pip value right first, then size the position.
What is the pip value for one mini or micro lot?
Exactly one tenth and one hundredth of the standard-lot figure. On a USD-quoted major that is $1.00 per pip for a mini lot and $0.10 for a micro lot. The calculator accepts any custom lot size, including the fractional ones most retail accounts actually trade.
How do I calculate pip value for gold or indices?
Metals and indices do not use the forex convention. Gold trades a 100-ounce contract where platforms disagree on whether a pip is a 0.01 move or a full $1 move, and index contracts are quoted in points. Always confirm the per-contract figure in your own terminal before sizing a metals or index position.
Does pip value depend on my broker?
Contract size does, which changes everything downstream. The 100,000-unit standard lot is near universal, but cent accounts multiply by one hundredth and some brokers use non-standard contracts. The maths here uses the retail standard, so verify yours once and the number holds.
Where does the exchange rate come from?
A live public FX feed, fetched in your browser when the page loads. USD-quoted pairs do not need a conversion and are exact regardless. If the feed is unreachable the tool says so rather than guessing.
Trading is high risk and most retail accounts lose money. This tool is education only, not financial advice.