Lesson A3 · Part A: Foundations3 of 107 min
Pips, lots and what a move is worth
The ruler of the forex world. Learn to measure moves in pips and convert them into money.
§1The pip
A pip is the standard unit of price movement. For most pairs it's the fourth decimal place (0.0001). For yen pairs it's the second (0.01).
Many brokers show a fifth decimal — a 'pipette', a tenth of a pip. Don't let the extra digit confuse your counting.
§2The lot
Position size is measured in lots. A standard lot is 100,000 units of the base currency, a mini lot 10,000 and a micro lot 1,000.
On a USD-quoted pair such as EUR/USD, one pip is worth about $10 per standard lot, $1 per mini lot and $0.10 per micro lot.
01Trade: 0.30 lots EUR/USD (30,000 units)
02Pip value: 30,000 × 0.0001 = $3.00
03Move: +25 pips → 25 × $3.00 = +$75.00
remember this:
- 1 pip = 0.0001 on most pairs, 0.01 on yen pairs.
- 1 standard lot = 100,000 units; pip value scales with lot size.
- Always convert pips to money before you place a trade.
Checkpoint
Q1.USD/JPY moves from 151.20 to 151.65. How many pips is that?
Q2.Roughly what is one pip worth on 1 standard lot of EUR/USD?