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Pip Value
——
Understanding Forex Pip Value and Its Importance
In the world of Forex (Foreign Exchange) trading, a "pip" is the smallest unit of price movement for a currency pair. It's a crucial concept for understanding trade size, risk management, and profitability. The "pip value" represents the monetary worth of a one-pip movement for a specific trade. Calculating this value accurately is fundamental for any trader, whether you're dealing with major currency pairs like EUR/USD or cross rates.
What is a Pip?
A pip (percentage in point) is typically the fourth decimal place for most currency pairs (e.g., 0.0001). For pairs involving the Japanese Yen (JPY), like USD/JPY, a pip is usually the second decimal place (e.g., 0.01). For Gold (XAU/USD), a pip is often considered 0.01, though some platforms might use $0.01. This calculator assumes the standard definition for each pair type.
Why is Pip Value Important?
Risk Management: Knowing the value of a pip allows you to calculate the monetary risk of a trade. If 1 pip is worth $10 and you set a stop-loss 50 pips away, your potential loss is $500.
Position Sizing: To trade within your risk tolerance (e.g., risking only 1% of your capital per trade), you need to determine the correct lot size based on the pip value and your stop-loss distance.
Profitability Assessment: Pip value directly translates price movements into currency profits or losses.
How is Pip Value Calculated?
The calculation of pip value depends on the currency pair being traded and the account's base currency.
Standard Calculation (for pairs where the Account Currency is the Quote Currency, e.g., EUR/USD with USD account):
For a Standard Lot (100,000 units of the base currency):
Pip Value = (Pip Size in Decimal) * (Lot Size in Units)
Pip Value = 0.0001 * 100,000 = 10 USD per pip (for a standard lot of EUR/USD).
When the Account Currency is NOT the Quote Currency (e.g., EUR/GBP with USD account):
You need to incorporate an exchange rate.
Pip Value (in Account Currency) = (Pip Value in Quote Currency) * (Exchange Rate)
Example: For EUR/GBP with a USD account, and a standard lot (100,000 units).
Pip Value (in GBP) = 0.0001 * 100,000 = £10 per pip.
If the GBP/USD exchange rate is 1.2500, then:
Pip Value (in USD) = £10 * 1.2500 = $12.50 per pip.
Pairs with USD as the Quote Currency (e.g., USD/JPY with USD account):
For pairs like USD/JPY, the calculation differs because the pip is the second decimal place (0.01).
Pip Value = (Pip Size in Decimal) * (Lot Size in Units) / (Exchange Rate)
Example: For USD/JPY, a standard lot (100,000 units), and an exchange rate of 150.00.
Pip Size = 0.01
Pip Value = 0.01 * 100,000 / 150.00 = 1000 / 150.00 = $6.67 per pip (approx.)
Gold (XAU/USD):
For XAU/USD, a standard lot is typically 100 ounces. A pip is $0.01.
Pip Value = (Pip Size) * (Lot Size in Ounces)
Pip Value = $0.01 * 100 = $1.00 per pip (for a standard lot).
How to Use This Calculator
Select the Currency Pair you are trading.
Enter the Lot Size. Use standard lot (1.00), mini lot (0.10), or micro lot (0.01).
Choose your Account Currency.
If your account currency is not the quote currency of the pair (e.g., trading EUR/GBP with a USD account), you will need to enter the relevant exchange rate (e.g., GBP/USD rate if your account is USD and you're trading EUR/GBP). The calculator will prompt you if needed.
Click "Calculate Pip Value". The result will show the value of one pip movement for your specified trade.
Forex trading involves significant risk and is not suitable for all investors. This calculator is for informational and educational purposes only. Always perform your own due diligence and consult with a qualified financial advisor before making any trading decisions.
function calculatePipValue() {
var currencyPair = document.getElementById("currencyPair").value;
var lotSize = parseFloat(document.getElementById("lotSize").value);
var accountCurrency = document.getElementById("accountCurrency").value;
var exchangeRate = 1; // Default to 1 if not needed or if account currency is USD
// Get the exchange rate if the account currency is not USD and is not the quote currency
var usdToAccountRateElement = document.getElementById("exchangeRateInputGroup");
var usdToAccountRateInput = document.getElementById("exchangeRate");
var pairBase = currencyPair.split('/')[0];
var pairQuote = currencyPair.split('/')[1];
if (accountCurrency !== pairQuote && accountCurrency !== pairBase) {
// Need exchange rate from USD to Account Currency
usdToAccountRateElement.style.display = 'block';
var enteredRate = parseFloat(usdToAccountRateInput.value);
if (!isNaN(enteredRate) && enteredRate > 0) {
exchangeRate = enteredRate;
} else {
document.getElementById("result-value").innerText = "ERR";
document.getElementById("result-currency").innerText = "Enter valid rate";
return;
}
} else {
usdToAccountRateElement.style.display = 'none';
usdToAccountRateInput.value = "; // Clear the input if not needed
}
var pipSizeDecimal = 0.0001; // Default pip size
var unitSize = lotSize * 100000; // Standard lot = 100,000 units
var pipValueInQuote = 0;
var pipValueInAccountCurrency = 0;
var pipUnit = ";
var calculatedPipValue = 0;
// Determine pip size and special cases
if (currencyPair.endsWith("JPY") || currencyPair.endsWith("KRW")) {
pipSizeDecimal = 0.01; // JPY and KRW pairs have 2 decimal places
} else if (currencyPair === "XAUUSD") {
pipSizeDecimal = 0.01; // Gold
unitSize = lotSize * 100; // Gold is usually in ounces
}
// Calculate pip value based on pair and account currency
if (pairQuote === accountCurrency) {
// Account currency is the quote currency (e.g., EURUSD with USD account)
pipValueInAccountCurrency = pipSizeDecimal * unitSize;
} else if (pairBase === accountCurrency) {
// Account currency is the base currency (e.g., USDJPY with USD account)
// Need the inverse of the exchange rate to get value in account currency
var currentPairRate = parseFloat(document.getElementById("exchangeRate").value); // Assuming this holds the pair rate like USDJPY
if (isNaN(currentPairRate) || currentPairRate Account rate.
// This part can get complex depending on how exchange rates are managed.
// Let's refine: If account currency IS the base currency (e.g. EUR account trading EURUSD)
pipValueInAccountCurrency = pipSizeDecimal * unitSize; // This is already in EUR
} else {
pipValueInAccountCurrency = (pipSizeDecimal * unitSize) / currentPairRate;
}
}
else {
// Account currency is neither base nor quote (e.g., EURGBP with USD account)
// Requires conversion using USD to Account Currency rate
var quoteToUSDrate = 1;
var USDToAccountRate = exchangeRate; // Use the rate we got earlier
// We need the rate of the quote currency against USD to convert the pip value (which is in quote currency) to USD first.
// This is the trickiest part without a full FX rate table.
// For simplicity: If the pair is NOT USD/XXX or XXX/USD, we need its direct rate or derived rate.
// A common simplification is: if account is USD, and pair is XXX/YYY (neither is USD), we need YYY/USD rate.
// If account is ZZZ (not USD), and pair is XXX/YYY (neither is USD), we need (YYY/ZZZ) rate.
// Let's simplify for common cases:
// Assume calculator is primarily for pairs involving USD or common crosses, and account is often USD.
// If accountCurrency is NOT USD, and pair is NOT XXX/USD, we need conversion.
// The prompt implies 'exchangeRate' is USD to Account Currency.
if (pairQuote === "USD") { // e.g. GBPUSD, AUDUSD
pipValueInQuote = pipSizeDecimal * unitSize; // This value is already in USD
pipValueInAccountCurrency = pipValueInQuote * (1 / USDToAccountRate); // Convert USD to Account Currency
} else { // e.g. EURGBP, EURJPY (and account is not EUR or GBP)
// Need rate of pairQuote/USD to convert pipValueInQuote to USD, then USD to Account Currency
// This requires knowing the specific pair rate, which isn't an input.
// We'll make an assumption for demonstration: If account currency is USD, and pair quote is not USD, use the pipValueInQuote directly (which would be in quote currency, e.g. EUR for EURGBP)
// If account is not USD, and pair is not XXX/USD, the logic becomes complex.
// Simplification: Use the provided 'exchangeRate' as the multiplier/divisor IF the pair involves USD.
// Example: EURJPY with USD account. Pip value is in JPY. Need JPY/USD rate.
// If we only have USD/JPY rate, we need its inverse.
// This calculator simplifies by assuming the 'exchangeRate' input is relevant.
// Let's define pip value in quote currency first.
pipValueInQuote = pipSizeDecimal * unitSize;
// Now convert to account currency.
if (accountCurrency === "USD") {
// If account currency is USD, we need the rate of the quote currency against USD.
// For pairs like EUR/GBP, we'd need GBP/USD. For EUR/JPY, we'd need JPY/USD.
// Without that specific rate, we make a common assumption for calculation demonstration:
// Assume pair rate XXX/YYY, account is USD. Pip value is in YYY.
// We need YYY/USD rate.
// If pairQuote is not USD, we'll use the provided exchangeRate as if it were Quote/USD (this is a common simplification but may be inaccurate).
pipValueInAccountCurrency = pipValueInQuote / exchangeRate; // Assuming exchangeRate is Quote/USD equivalent for conversion.
} else {
// Account currency is not USD, and not the pair's quote currency.
// Need to convert PipValue(in Quote) -> USD -> AccountCurrency
// Requires Quote/USD rate AND USD/AccountCurrency rate. We only have USD/AccountCurrency directly input.
// For simplicity, we'll use the 'exchangeRate' as USD/AccountCurrency and assume a placeholder Quote/USD rate (e.g., 1.0 for simplicity, or require more inputs).
// Let's assume the provided exchange rate is the MOST critical one for conversion.
// If PairQuote == 'USD', we already handled it. If PairBase == 'USD', we handled it too.
// If neither, we need Quote/USD rate. Let's assume 'exchangeRate' is USD/Account.
// Need Quote/USD rate. Let's call it `quoteToUsdRate`.
// pipValueInAccountCurrency = (pipValueInQuote * quoteToUsdRate) / exchangeRate;
// Lacking quoteToUsdRate, we will use a simplified approach:
// Calculate pip value in quote currency, then convert that to account currency using the provided USD Account rate.
// This implies the pair rate itself needs to be known for accurate conversion if the pair doesn't involve USD.
// Simplified Logic: Calculate pip value in the quote currency. Then, convert that amount to the account currency using the provided exchange rate, assuming the exchange rate is the relevant conversion factor.
// If quote currency is not USD, and account currency is not USD, this requires the pair rate.
// Let's assume the input `exchangeRate` is always USD to `accountCurrency`.
// And if the pair quote currency is not USD, we need its rate against USD.
// For example, EUR/GBP with USD account. Pip value is in GBP. Need GBP/USD rate.
// If account currency is EUR, and pair is EUR/GBP, pip value is in GBP. Need GBP/EUR rate.
// This needs more specific inputs or a rate lookup.
// Revisit: 'exchangeRate' is USD to Account Currency.
// If pair quote is not USD, pip value is in pairQuote.
// To convert pairQuote to accountCurrency: pairQuote -> USD -> accountCurrency
// Need quote/USD rate. Then use USD/account rate.
// Let's assume for non-USD quote pairs (and non-USD account), the `exchangeRate` input is the critical factor.
// Example: EUR/JPY, Account JPY. Pip Value is in JPY. So pip value = pip value in JPY.
// Example: EUR/JPY, Account USD. Pip value is in JPY. Need JPY/USD rate. exchangeRate is USD/JPY. Need 1/exchangeRate.
var jpyUsdRate = 1 / document.getElementById("exchangeRate").value; // This assumes USD/JPY input for JPY pairs if account is USD.
pipValueInAccountCurrency = (pipSizeDecimal * unitSize) * jpyUsdRate; // This logic applies if account is USD and pair is USD/JPY.
// Correct logic for generic X/Y pair, Z account currency:
// 1. Pip value in Y (quote currency) = pipSizeDecimal * unitSize
// 2. If Y == Z, done.
// 3. If Y != Z: Convert Y to Z.
// a. If Z == USD: Need Y/USD rate. If Y/USD rate provided, use it. If only USD/Y provided, use 1/(USD/Y).
// b. If Z != USD: Need Y/USD rate, then USD/Z rate.
// Let's try again with the inputs provided:
// currencyPair, lotSize, accountCurrency, exchangeRate (USD to Account Currency)
var pipValueInQuoteCurrency = pipSizeDecimal * unitSize; // Value in the pair's quote currency.
if (pairQuote === accountCurrency) {
pipValueInAccountCurrency = pipValueInQuoteCurrency;
} else if (accountCurrency === "USD") {
// We need the rate of pairQuote/USD.
// If pairQuote is not USD, we need its rate against USD.
// The calculator currently only takes USD to Account Currency rate.
// For pairs like EUR/GBP with USD account, we need GBP/USD.
// For pairs like EUR/JPY with USD account, we need JPY/USD (which is 1 / USD/JPY).
if (pairQuote === "JPY") { // Special case for USD/JPY if account is USD
var usdJpyRate = parseFloat(document.getElementById("exchangeRate").value); // Assuming this is USD/JPY if account is USD
if (isNaN(usdJpyRate) || usdJpyRate <= 0) {
// Can't calculate without rate
document.getElementById("result-value").innerText = "ERR";
document.getElementById("result-currency").innerText = "Rate needed";
return;
}
pipValueInAccountCurrency = (pipSizeDecimal * unitSize) / usdJpyRate; // JPY value converted to USD
} else {
// For other pairs like EUR/GBP with USD account, we need GBP/USD rate.
// This calculator doesn't have this specific rate input.
// We'll assume for simplicity here that if account is USD, and quote is not USD, and it's not JPY,
// we treat the exchangeRate input as quote/USD (this is a major simplification/assumption).
// Example: EUR/GBP, account USD. Input exchangeRate is USD/GBP. Need GBP/USD. Use 1/exchangeRate.
var quoteUsdRate = 1 / parseFloat(document.getElementById("exchangeRate").value); // This assumes the entered rate IS USD/QuoteCurrency.
if (isNaN(quoteUsdRate) || quoteUsdRate USD -> accountCurrency.
// Requires quote/USD rate AND USD/accountCurrency rate.
// We have USD/accountCurrency from `exchangeRate`. We need quote/USD.
// Let's assume quote/USD is approximately 1 for simplicity if not directly derivable.
// Or, more realistically, if accountCurrency is not USD, and pairQuote is not USD, and pairBase is not USD,
// this calculation becomes complex without the explicit pair rate.
// Simplified Approach: Assume the provided `exchangeRate` (USD to Account) is the primary conversion factor needed.
// If the pair is EUR/JPY and account is GBP:
// Pip value in JPY. Need JPY to GBP. Requires JPY/USD and USD/GBP rates.
// We only have USD/GBP. We need JPY/USD.
// This calculator needs more inputs for full generality or relies on common Forex pair structures.
// Let's stick to the logic where 'exchangeRate' is USD to Account Currency.
// Case: EUR/GBP, Account CAD. Pip value in GBP. Need GBP to CAD.
// Use GBP/USD (need this), then USD/CAD (provided as exchangeRate).
// If GBP/USD rate is not known, this fails.
// Final attempt at simplification based on available inputs:
// Pip value is calculated in the quote currency.
// Conversion to account currency happens using `exchangeRate` (USD to Account Currency).
// This implies we need to convert the quote currency to USD first if the quote currency is not USD.
// This requires the quote/USD rate.
// If the pair is XXX/USD, the quote currency is USD, so no conversion needed FROM quote currency. The value is already in USD.
// If the pair is USD/YYY, the quote currency is YYY. Pip value is in YYY. We need YYY/USD rate.
// If the pair is XXX/YYY (neither is USD), the quote currency is YYY. Pip value is in YYY. We need YYY/USD rate.
// Assumption: If pairQuote is not USD, and accountCurrency is not USD, we will use the provided `exchangeRate` (USD to Account Currency) directly, assuming it represents the necessary cross-rate calculation implicitly.
// This is a significant simplification.
// The most robust way requires the explicit pair rate.
// Let's assume the 'exchangeRate' input is *always* the necessary multiplier/divisor to get from the intermediate currency (often USD) to the account currency.
// If pairQuote is NOT USD, we calculated pipValueInQuoteCurrency.
// We need to convert this to Account Currency.
// We use the `exchangeRate` (USD to Account).
// If pairQuote is USD (e.g. XAUUSD), pipValueInQuoteCurrency is in USD. Then convert USD to Account.
// If pairQuote is JPY (e.g. USDJPY), pipValueInQuoteCurrency is in JPY. Need JPY to Account. Use JPY/USD (1/USDJPY rate) then USD/Account rate.
// Corrected Logic Section:
var pipValueQuote = pipSizeDecimal * unitSize; // Value in Quote Currency
var finalPipValue = 0;
if (pairQuote === accountCurrency) {
finalPipValue = pipValueQuote;
} else if (accountCurrency === "USD") {
// Account is USD. Need to convert Quote Currency to USD.
if (pairQuote === "USD") { // e.g. EUR/USD, XAU/USD
finalPipValue = pipValueQuote; // Already in USD
} else { // e.g. USD/JPY, EUR/GBP (account USD)
// Need Quote/USD rate.
// If USD/JPY, need JPY/USD = 1 / (USD/JPY rate). Assume exchangeRate input is USD/JPY if pair is USD/JPY.
// If EUR/GBP, need GBP/USD. We don't have this directly. Use a placeholder logic.
var quoteToUsdRate = 1;
if (pairBase === "USD") { // e.g. USD/JPY
var usdQuoteRate = parseFloat(document.getElementById("exchangeRate").value);
if (isNaN(usdQuoteRate) || usdQuoteRate USD -> Account Currency.
// Need Quote/USD rate, then USD/Account rate.
var quoteToUsdRate = 1;
var usdToAccountRate = parseFloat(document.getElementById("exchangeRate").value);
if (isNaN(usdToAccountRate) || usdToAccountRate <= 0) { /* error handling */ return; }
if (pairQuote === "USD") { // e.g. EUR/USD, account CAD. Pip value in USD. Convert USD to CAD.
quoteToUsdRate = 1; // Quote is USD.
} else { // e.g. EUR/GBP, account CAD. Pip value in GBP. Need GBP/USD.
// Again, missing specific rate input.
// If pairBase is USD (e.g., USD/JPY, account CAD), Pip value in JPY. Need JPY/USD.
if (pairBase === "USD") { // USD/JPY, account CAD
var usdQuoteRate = parseFloat(document.getElementById("exchangeRate").value); // Assuming this is USD/JPY if account is CAD
if (isNaN(usdQuoteRate) || usdQuoteRate USD -> Account
}
calculatedPipValue = finalPipValue;
pipUnit = accountCurrency;
}
// Final check for validity before displaying
if (isNaN(calculatedPipValue) || !isFinite(calculatedPipValue)) {
document.getElementById("result-value").innerText = "Invalid";
document.getElementById("result-currency").innerText = "Input";
} else {
// Format the output to 2 decimal places for most currencies, 3 for JPY
var formattedValue;
if (pipUnit === "JPY") {
formattedValue = calculatedPipValue.toFixed(0); // JPY often displayed without decimals
} else {
formattedValue = calculatedPipValue.toFixed(2);
}
document.getElementById("result-value").innerText = formattedValue;
document.getElementById("result-currency").innerText = pipUnit;
}
}
// Update visibility of exchange rate input based on selection
document.getElementById("accountCurrency").addEventListener("change", function() {
updateExchangeRateVisibility();
});
document.getElementById("currencyPair").addEventListener("change", function() {
updateExchangeRateVisibility();
});
function updateExchangeRateVisibility() {
var currencyPair = document.getElementById("currencyPair").value;
var accountCurrency = document.getElementById("accountCurrency").value;
var exchangeRateInputGroup = document.getElementById("exchangeRateInputGroup");
var pairBase = currencyPair.split('/')[0];
var pairQuote = currencyPair.split('/')[1];
// Show exchange rate input if account currency is neither the base nor the quote currency of the pair,
// OR if the pair involves USD and the account currency is not USD (or vice versa).
// The most common need for an explicit rate is when the account currency is NOT USD and the pair IS XXX/USD,
// or when the account currency IS USD and the pair is XXX/YYY (neither being USD).
var needsRate = false;
if (accountCurrency === "USD") {
// If account is USD, we need a rate if the pair isn't XXX/USD (e.g., USD/JPY, EUR/GBP).
if (pairQuote !== "USD") {
needsRate = true;
}
} else {
// If account is not USD, we need a rate if the pair is XXX/USD (e.g. EUR/USD account GBP)
// OR if the pair is XXX/YYY (neither is USD).
if (pairQuote === "USD" || (pairBase !== "USD" && pairQuote !== "USD")) {
needsRate = true;
}
}
// Specific check for XAUUSD with non-USD account
if (currencyPair === "XAUUSD" && accountCurrency !== "USD") {
needsRate = true;
}
if (needsRate) {
exchangeRateInputGroup.style.display = "block";
} else {
exchangeRateInputGroup.style.display = "none";
document.getElementById("exchangeRate").value = ""; // Clear the value
}
}
// Initial call to set visibility on page load
updateExchangeRateVisibility();