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How to Calculate a Pip Value in Forex Trading? Posted: 28 Aug 2008 05:47 AM PDT In the Foreign Exchange Market, a pip (percentage in point) is the smallest increment in any currency pair. For instance, if the pair EUR\USD is trading at 1.5530 and the pair rate appreciates to 1.5540, this means the pair completed a 10 pip move. At ForexYard, the pip value is worth approximately $1. For example, the pip value of Gold is worth $1, as well as the GBP/USD pair. However, there are exceptions: When trading Silver for example, 1 pip is worth $10, and in the EUR/GBP cross, 1 pip is worth $1.50. And the GBP/NZD cross on the other hand, 1 pip is worth only $0.57. Just to ease the process, pip calculation is done as followed: For example, if Gold prices are currently $890.00. Calculating the pip value will be done in this manner: 0.01*890/100,000 = $1. In order to stay up to date with the pip values at ForexYard, traders are advised to occasionally take a look at the “Instruments” table on the platform. On this table, under the “Pip Value” headline, there is an up-to-date record of all our currencies’ and commodities’ pip values. The value of one pip is very important in the forex market. Its importance is derived from the fact that the market is extremely volatile, and the pip value determines how much of the fluctuations effect your open positions. One should always keep informed on how much one pip is worth before opening a new position. It is as important as anything else you ought to know about currency trading.

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