Pip Calculator

The pip calculator in Forex represents a Forex calculator that calculates the value of a pip in the currency you want by defining following values:

• number of pips
• lot size used
• currency pair
• deposit currency

Why do you need a pip calculator?

You can calculate the value for a number of pips. And that means for example if you have 100 pips as a stop loss or take profit set, then you can calculate how much that will be in terms of a currency you select.

How to use the pip calculator?

Inside the calculator you have several fields you need to fill with the data. And those are the number of pips, currency pair, deposit currency and lot size. At the end you click the button Calculate and you get the value of a pip.

In this article I will show you all details you need to know about what is pip calculator and what you can get with using it, why you should use it to speed up the process of calculating pip value and how to use it so you do not get confused when looking at pip calculator.

About the Pip Value Calculator

The pip calculator is a Forex calculator, a tool you can and should use to calculate the value of a pip in the currency you want. Currency you want is usually a deposit currency.

Deposit currency represents the currency you have your trading account in.

How Does the Forex Pip Calculator Work?

Before moving forward please pay attention!

You can switch between Units and Lots so have in mind not to make mistakes and use Units instead lots thinking that you are using Lots.

First image shows you a field which can be changed. Common is set to “Lots (trade size)“, but you can switch that to Units.

Switch from Lots to Units by clicking on the settings and then click on the blue “Switch to units” in blue written.

This will change from Lots to Units so you can enter the number of units. Have in mind that 1 lot is 100,000 units.

When you switch from Lots to Units you will see a field with the “Units (trade size)“. If you make a mistake and put 1 in the field where the units are, you will have an error in the calculation.

If you want to return back from Units to Lots simply repeat the process of changing. Click on the settings next to “Units (trade size)” and then click again on the “Switch to lots” written in blue.

The Forex pip calculator works in a way that takes the entry values, number of pips you want to get the value of, currency pair, deposit currency and the lot size.

Then he calculates the pip value. But the details about the calculation are as follows.

First, let me show you the connection between the Pip and the Lot Size.

The lot size in the Forex is defined like this:

Pip Calculator Profit

When you calculate the pip value you can easily calculate profit with pips.

Pip profit would be equal to:

Pip profit = Number of pips x Pip value

Let’s define first what we need for pip calculation.

Currency pair = EURUSD

Deposit currency = USD

Lot size: 1 standard lot (1.00 or 100,000 units)

If you have open a BUY order with one standard lot, 1.00, at the price EURUSD = 1.1234 and you have closed that trade at the price EURUSD = 1.1238 then the pip profit would be:

Number of pips won = 1.1238 – 1.1234 = 0.0004 = 4 pips

The pip value for USD as a deposit currency and for one lot size used we would get:

Pip value = Pip x Lot size

Pip value = 0.0001 x 100,000

Pip value = $10

Now, we can calculate the pip profit:

Pip profit = Number of pips x Pip value

Pip profit = 4 x Pip value 

Pip profit = 4 x $10

Pip profit = $40 

Pip Calculator With Leverage

When you use leverage in trading the value of a pip will not change. And that is because you have formula for pip value equal to:

Pip value = (Pip / Current market price) x Lot size

So, the leverage is not in the calculation and it will not affect the pip value.

Read more: What is Leverage in Forex

But, leverage has an impact on the margin you will need to open a position and that means to open a trade.

Margin — This is how much capital (margin) is needed in order to open and maintain your position

Read more: What is Margin in Forex

If you have leverage 1:100 the margin will be equal to:

Margin = Position size / leverage

Margin = 1 lot / 100

Margin = 100,000 / 100

Margin = $100

This means if you have leverage 1:100 then you would need to have $100 on your trading account set aside to open a trade. This amount a broker set aside and it is not available for trading. So, have in mind to have more money on the trading account if you want to open a trade with one standard lot.

As you can see the pip value will not change based on the leverage, but the lot size will be needed to adjust to open a position.

If you do not have too much money you should open a lower lot size, like a mini lot size which is 10,000 units. That would affect the pip value because the pip value would be 10 times lower with lot size equal to 10,000 units.

Disclaimer

Calculation`s made in the trading calculator are for informational purposes only. Whilst every effort is made to ensure the accuracy of this information, you should not rely upon it as being complete or up to date. Furthermore this information may be subject to change at any time.