Pip Value
Pip value is the money a one-pip move is worth per position size, the number that converts price distance into risk.
Pip value is what one pip is worth per position: about $10 per standard lot on USD-quoted pairs, $1 on a mini lot, $0.10 on a micro. It converts stop distance into real risk.
Pip value is the monetary value of a one-pip move in a position of a given size. For a standard lot (100,000 units) of a USD-quoted pair it is roughly $10; a mini lot is $1 and a micro lot $0.10. Pip value changes with the pair and account currency, and it is the number that connects your stop distance to your actual risk. Position sizing starts with pip value.
How It Works
- Standard lot pip value around $10 for USD-quoted pairs
- Scales with lot size: mini $1, micro $0.10
- Differs when USD is the base currency or the account is not in USD
Trading Tips
Calculate risk as stop distance (in pips) x pip value x lots
Use a pip-value calculator for exotic pairs and non-USD accounts
JPY pairs quote pips at 0.01, changing the math
Pip Value Example
Say your stop sits 25 pips away on GBP/USD and you trade a standard lot at about $10 per pip. That stop is worth $250 of risk. Drop to a mini lot and the same stop costs $25. Same trade, same stop, different bill.
How Traders Use Pip Value
Run every trade through one equation before entry: stop distance in pips times pip value times lots equals your risk. If the answer surprises you, the size is wrong, not the plan.
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