Learn to Trade Forex; What is pip value Pip values:

What is pip value?**

Currency pairs are quoted using 5, 3, or 2 decimal places, also known as fractional pips or pipettes.

On a 5 decimal place currency pair, a pip is 0.00010. On a 3 decimal place currency pair, a pip is 0.010. On a 2 decimal place currency pair, a pip is 0.10. For example, if GBP/USD moves from 1.51542 to 1.51552, that .00010 USD move higher is one pip.

When trading FX and other symbols, there are simple rules to calculate the pip value of a trade to quickly determine potential gains and losses.

For a spot instrument, the pip value is always in the second quoted symbol of the currency pair. For example, for EUR/AUD, the pip value is based in AUD. This applies to commodity pairs such as Gold (XAU/USD) where the pip value is in USD.

For indices, the point value is based on the currency of the country hosting the stock index. For instance, GER40 is traded in Europe, so its point value is in EUR, while US500 is traded in the US, so its point value is in USD.

The pip value scales in direct proportion to the trade size, meaning a 2-lot trade has twice the value per pip as a 1-lot trade.

Pip values:

FX pairs

Commodities