# What is a pip? How to calculate pip value, with examples > A pip is the smallest standard price step in a currency pair. Here is how pips, pipettes and pip values work on EUR/USD, USD/JPY, crosses and gold. - Canonical URL: https://forextradingcommunity.com/news/what-is-a-pip-and-how-to-calculate-pip-value/ - Type: Guide - Published: 2026-09-14 - Updated: 2026-09-14 - Publisher: Forex Trading Community (https://forextradingcommunity.com), FTC Editorial Team - Currencies: USD, EUR, JPY Currency prices move in tiny increments, so traders count those moves in **pips** rather than in cents or fractions of a cent. Once you know what a pip is worth on your position, you can work out profit, loss and risk before you place a trade. ## What a pip is For most currency pairs a pip is the fourth decimal place: **0.0001**. If EUR/USD moves from 1.1500 to 1.1501, it has moved one pip. Pairs that include the Japanese yen are quoted with fewer decimals, so for them a pip is the second decimal place: **0.01**. If USD/JPY moves from 150.00 to 150.01, that is one pip. Most brokers now quote one extra decimal. That fifth digit on EUR/USD, or third digit on USD/JPY, is a **pipette**, worth one tenth of a pip. A spread shown as 0.6 means six tenths of a pip. ## How much one pip is worth The value of a pip depends on three things: the size of your position, the pair, and the currency your account is held in. **When the US dollar is the second currency** (EUR/USD, GBP/USD, AUD/USD) and your account is in dollars, the calculation is simple: - 1 standard lot (100,000 units): **$10 per pip** - 1 mini lot (10,000 units): **$1 per pip** - 1 micro lot (1,000 units): **$0.10 per pip** **When the yen is the second currency,** a pip on one standard lot is worth ¥1,000. To express that in dollars, divide by the exchange rate. With USD/JPY at 150.00, one pip is worth about $6.67 per standard lot. The dollar value changes as the exchange rate moves. **On a cross such as EUR/GBP,** a pip on one standard lot is worth £10. If your account is in dollars and GBP/USD is 1.35, that is $13.50 per pip. ## A worked example You buy 0.5 lots of EUR/USD at 1.1500 and close the trade at 1.1530. 1. The price moved 30 pips in your favour. 2. Half a standard lot is worth $5 per pip. 3. Profit before costs: 30 × $5 = **$150**. Had the price fallen 30 pips instead, the loss would have been the same $150, plus the spread and any commission. ## Gold is different Gold (XAU/USD) is usually quoted to two decimal places, and brokers don't agree on what a "pip" means for it. Contract sizes also vary: many brokers set one lot at 100 troy ounces, which makes a $1 move in the gold price worth $100 per lot, but not all do. Always check the contract specifications on your broker's platform before trading metals. ## Why pip value matters more than pip count A 20-pip stop-loss sounds small, but on two standard lots of EUR/USD it risks $400. Traders who size positions properly start from the amount they are willing to lose, then work backwards to the position size. [Position sizing](/news/position-sizing-and-risk-per-trade/) walks through that calculation step by step. ## Common questions ### How much is one pip worth on EUR/USD? On a dollar account, $10 per pip for one standard lot (100,000 units), $1 for a mini lot and $0.10 for a micro lot. ### What is a pipette? A pipette is one tenth of a pip: the fifth decimal place on most pairs, or the third on yen pairs. ### Why is a pip 0.01 on USD/JPY? Yen pairs are quoted with two decimal places because one yen is worth much less than one dollar, so the standard pip is the second decimal instead of the fourth. --- This article is for information only and is not financial advice. Trading forex and CFDs carries a high risk of losing money.