Pip (Percentage in Point)

A point in percentage or pip is a standardized unit of measure in an exchange rate. In forex, the value of the exchange of a currency is represented in pips. 

Major currencies are priced to four decimal points, excluding the Japanese yen, which is priced to two decimal points only.

  • Most currency pairs, one pip = 0.0001
  • Currency paired with Japanese Yen, one pip = 0.01


Most currency pairs, such as the USD/EUR, trade-in 4 decimal places ( 1 pip = 0.0001) and trade in terminals in 5 decimal places ( 1 technical pip = 0.00001). Spreads, order distances, and other parameters are normally quoted in 4 decimals in company websites; however, in trading platforms, they are quoted in 5 decimals.

Most currency pairs trade in 4 decimal places except currencies paired with the Japanese Yen, where the pip is 0.01, and the technical pip is 0.001.


For example, the currency pair GBP/USD. Assume that its buy price is 1.68551. 

If it changes from 1.68551 to 1.68552, that means it increased by 1 technical pip. If the price changes from 1.68551 to 1.68550, that means it decreased by 1 technical pip.

In the currency pair USD/JPY, an increase of 1 usual pip means that from 125.87, it rose to 125.88. 

To manage your risks, you must learn the pip value of each position.


Calculating Pip Value

The value of a pip depends on these three factors: (1) quoted currency, (2) volume of the trade, and (3) exchange rate.

These factors significantly affect trade as even a change of 1 pip can profoundly impact the value of the open position.


To calculate the value of one pip, the following formula is used:

The value of 1 pip = (Pip in decimal places * Trade Volume)


Trading position volume Calculation 1 PIP_VALUE
100,000 EUR 100,000 * 0.0001 10 USD
10,000 EUR 10,000 * 0.0001 1 USD
1,000 EUR 1,000 * 0.0001 0.1 USD
100 EUR 100 * 0.0001 0.01 USD

Example A: 1 pip volume in EUR/USD is equal to 0.0001


 Example B: 1 pip volume in USD/JPY is equal to 0.01

Trading position volume Calculation 1 PIP_VALUE
100,000 USD 100,000 * 0.01 1000 JPY
10,000 USD 10,000 * 0.01 100 JPY
1,000 USD 1,000 * 0.01 10 JPY
100 USD 100 * 0.01 1 JPY
Risk disclaimer "TS Software Ltd – Trust Company Complex, Ajeltake Road, Majuro, Ajeltake Island, MH 96960, Marshall Islands is a financial services institution outside the European Union Area, which is subject to the supervision of the IFMRRC Certificate 0395 AA V0155 Trading in Forex/ CFDs and Other Derivatives is highly speculative and carries a high level of risk. It is possible to lose all your capital. 70% of trading deals can be unprofitable. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent advice if necessary. Speculate only with funds that you can afford to lose. This Website may contain information in particular regarding financial services and products that could be regarded b a E.U. supervisory authority as an offer of financial services targeted in Europe. ESMA intervention measures do not apply to customers of TS Software Ltd and it is your responsibility to choose a company which is most suitable for your trading needs. By clicking continue you confirm that you have read, understood and agree to the risk disclosures, terms of service, cash policies, privacy policies and this notice and that you are visiting this website on your own initiative, without any encouragement whatsoever from umarkets.net or TS Software Ltd." Cookies notification: We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we assume that you are happy with it. Read more. Continue

Help with deposit?