Pips, lots, and pip value across pairs

In Foundation you learned that one standard lot of EUR/USD is worth about $10 per pip. That number is so familiar that many traders assume it's true for every pair. It isn't. A 30-pip move on one standard lot can be worth $200 on one pair and $380 on another. If you size every trade as if pips were always $10, your real risk will quietly drift away from your plan. This lesson gives you one method that works for every pair.

What you'll learn

• Pip size for standard and JPY pairs, and where pipettes fit
• The one principle behind every pip-value calculation
• Pip value for USD-quoted pairs, USD-based pairs, and crosses
• How to size positions correctly on any pair
• How your account currency affects the numbers

1. Pip size recap

Most brokers quote one extra digit — the pipette (one tenth of a pip). EUR/USD at 1.08503 is 1.0850 plus 3 pipettes. When your platform shows "points", check whether it means pips or pipettes — on 5-digit pricing, 10 points usually equal 1 pip.

2. The one principle

A pip is always worth a fixed amount of the quote currency.

For one standard lot (100,000 units of the base currency):

• Standard pairs: 100,000 × 0.0001 = 10 units of the quote currency
• JPY pairs: 100,000 × 0.01 = 1,000 yen

Then you convert that amount into your account currency. That's the whole method.

3. Three cases (for a USD account)

(All prices are illustrative.)

Case 1 — USD is the quote currency: EUR/USD, GBP/USD, AUD/USD, NZD/USD

The pip is already in dollars.

• 1 lot = $10 per pip. No conversion needed.

Case 2 — USD is the base currency: USD/JPY, USD/CAD, USD/CHF

The pip is in the other currency, so divide by the current price.

• USD/JPY at 150.00: ¥1,000 ÷ 150.00 = $6.67 per pip per lot
• USD/CAD at 1.3600: C$10 ÷ 1.3600 = $7.35 per pip per lot

Because the price is in the denominator, the pip value changes as the rate moves.

Case 3 — Crosses (no USD): EUR/GBP, EUR/JPY, GBP/JPY, AUD/NZD

Convert the quote currency to USD using the relevant USD rate.

• EUR/GBP: pip = £10 per lot. With GBP/USD at 1.2700: £10 × 1.2700 = $12.70 per pip
• EUR/JPY or GBP/JPY: pip = ¥1,000 per lot. With USD/JPY at 150.00: ¥1,000 ÷ 150.00 = $6.67 per pip

The same move, different money

One standard lot, a 30-pip move:

Nearly double the money on EUR/GBP compared with USD/JPY, for the "same" 30 pips.

4. Position sizing on any pair

The formula from Module 1.4 still works — you just use the correct pip value:

Position size (lots) = risk amount ÷ (stop in pips × pip value per lot)

Worked example 1: USD/CAD

• Account $5,000, risk 1% → $50
• Stop 30 pips; pip value at 1.3600 ≈ $7.35
• Size = $50 ÷ (30 × $7.35) = $50 ÷ $220.50 = 0.2267 → round down to 0.22 lots

Worked example 2: EUR/GBP

• Risk $50, stop 25 pips, pip value ≈ $12.70
• Size = $50 ÷ (25 × $12.70) = $50 ÷ $317.50 = 0.1575 → 0.15 lots

Worked example 3: USD/JPY

• Risk $50, stop 40 pips, pip value at 150.00 ≈ $6.67
• Size = $50 ÷ (40 × $6.67) = $50 ÷ $266.80 = 0.1874 → 0.18 lots

5. If your account isn't in US dollars

Everything above assumes a USD account. If your account is in EUR, GBP, or another currency, the principle is identical — you simply convert the pip value into your account currency instead.

• A EUR account trading EUR/USD: pip = $10 per lot → convert dollars to euros (at EUR/USD 1.0850, $10 ≈ €9.22).
• A GBP account trading EUR/GBP: pip = £10 per lot → already in your currency, no conversion.

Your platform does this automatically for profit and loss. The important thing is that your risk calculation uses the same currency your account is in.

Common beginner mistakes

• Assuming $10 per pip on every pair, especially JPY pairs and crosses.
• Confusing pips with points (pipettes) on 5-digit pricing — and placing stops 10 times closer than intended.
• Forgetting that pip value moves with the exchange rate on USD-based pairs and crosses.
• Using the wrong decimal for JPY pairs (0.0001 instead of 0.01).
• Not checking the platform's projected loss at the stop before confirming a trade.

Key terms

Practice

1. Calculate the pip value for one standard lot of EUR/USD, USD/JPY, USD/CHF, and GBP/JPY using today's prices.
2. Using your account size and 1% risk, calculate the position size for a 35-pip stop on each pair.
3. Enter each as a demo order (without sending it, if your platform allows) and compare the platform's projected loss at the stop with your calculation.
4. Check how your platform displays prices: 4/2-digit or 5/3-digit? What does "10 points" mean on your platform?

Quick recap

• A pip is always a fixed amount of the quote currency: 10 units per lot (¥1,000 for JPY pairs).
• Convert that amount into your account currency to get pip value.
• USD-quoted pairs are $10 per lot; USD-based pairs and crosses vary with exchange rates.
• The same number of pips can be worth very different amounts on different pairs.
• Always size positions with the correct pip value for the pair you're trading.