Pip Calculator: How to Calculate Pip Value

The foreign exchange (Forex) market is the largest financial market in the world, with over $7.5 trillion traded daily. Forex trading is becoming increasingly popular in India, especially with traders looking to profit from currency price movements.

One of the key concepts in Forex trading is PIPs (Percentage in Point)—they measure price changes between currency pairs and help traders calculate profits and losses. But how does it work? Read on to learn everything about PIPs in trading, how they're calculated, and more.

In this guide, we’ll explain:

• What a PIP is and how it works in Forex trading.
• How to calculate PIP values for different currency pairs.
• Why PIPs matter for risk management and trading costs.
• How to use our PIP Calculator to simplify your calculations.

What is a PIP in Forex?

A PIP (Percentage in Point) is the smallest price movement in most Forex trading platforms.

For most major currency pairs, 1 PIP = 0.0001 (fourth decimal place).

USD/INR Price Movement

If USD/INR moves from ₹82.5000 to ₹82.5020, the price has moved 20 PIPs.

Since Forex markets move rapidly, PIPs provide a standard unit to measure price changes efficiently.

Why are PIPs Important in Forex Trading?

PIPs are essential in Forex trading because they help traders:

• Calculate profits and losses – Every PIP movement impacts how much you earn or lose.
• Manage risk – Stop-loss and take-profit levels are set using PIPs.
• Understand spreads – Brokers charge fees through spreads, measured in PIPs.
• Analyse market volatility – Studying PIP movements helps identify highly volatile currency pairs.
• Compare broker pricing – Brokers offer different spreads in PIPs, impacting trading costs.

What is a Spread in Forex?

A spread is the difference between the buy price (bid) and the sell price (ask) of a currency pair.

Brokers earn money through spreads instead of charging direct commissions.

USD/INR Spread

• Buy Price (Bid) = ₹82.5100
• Sell Price (Ask) = ₹82.5000
• Spread = ₹82.5100 - ₹82.5000 = 10 PIPs

A narrower spread means lower trading costs, while a wider spread increases trading costs.

How Do PIPs Work with the Japanese Yen (JPY)?

Most currency pairs measure PIPs at the fourth decimal place (0.0001). However, JPY pairs are an exception.

For JPY currency pairs (like USD/JPY, INR/JPY), a PIP is measured at the second decimal place (0.01).

INR/JPY Price Movement

If INR/JPY moves from ¥1.600 to ¥1.620, the price has changed by 2.0 PIPs.

Understanding this is crucial when trading JPY pairs, as their price movements appear larger than those of other currencies.

What is Forex Pair Volatility?

Volatility refers to how much a currency pair moves in PIPs over a certain period (such as a day).

Highly volatile pairs experience bigger price swings, creating profit opportunities but also increasing risk.

Volatility Formula:

Volatility = Highest Price − Lowest Price

USD/INR Daily Volatility

If USD/INR reaches ₹82.80 and drops to ₹82.50, the daily volatility is: 82.80 − 82.50 = 30 PIPs

Traders use volatility indicators to manage risk and adjust their position sizes.

Types of Forex Currency Pairs

Forex pairs are classified into three categories:

1. Major Pairs (Most Traded Globally)

These involve highly liquid currencies like the US dollar and euro.

• EUR/USD – Most traded currency pair.
• GBP/USD – Important for Indian traders tracking UK markets.
• USD/JPY – Heavily influenced by global economic trends.
• USD/CHF – Considered a safe-haven pair.

2. Minor Pairs (Non-USD Pairs)

These do not include the US dollar but involve major global currencies.

• EUR/GBP – Popular for traders watching the UK and European economies.
• GBP/JPY – One of the most volatile Forex pairs.
• EUR/AUD – Used in European and Australian markets.

3. Exotic Pairs (Emerging Market Currencies)

These involve a major currency against an emerging market currency.

• USD/INR – The most traded Forex pair in India.
• GBP/INR – Important for Indian traders dealing with the UK market.
• EUR/INR – Tracks trade relations between India and the Eurozone.

Exotic pairs tend to have higher spreads and greater volatility.

How to Calculate the Value of a PIP in Forex

The value of a PIP depends on:

• The currency pair
• The lot size (Standard, Mini, or Micro)
• The exchange rate

PIP Value Formula:

PIP Value = (PIP Change × Lot Size) ÷ Exchange Rate

USD/INR PIP Value Calculation

• Currency Pair: USD/INR
• Lot Size: 1 Standard Lot (1,00,000 units)
• Exchange Rate: ₹82.50
• PIP Change: 0.0001

PIP Value = (0.0001 × 1,00,000) ÷ 82.50 = ₹12.12 per PIP

Forex trading platforms automatically calculate PIP values, but knowing the formula helps with risk management.

How Much is 50 PIPs Worth?

The value of 50 PIPs depends on the lot size:

If you trade 1 Standard Lot of USD/INR and the price moves 50 PIPs in your favour, your profit is ₹606. If the price moves against you, you lose ₹606.

How to Use Our India PIP Calculator

Instead of manually calculating PIPs, use our free PIP Calculator to instantly determine your profit or loss.

How It Works:

• Enter the currency pair (e.g., USD/INR).
• Select the lot size (Standard, Mini, Micro).
• Input your entry and exit price.
• Click "Calculate" to see your PIP value and potential profit/loss.

This tool saves time and ensures accurate calculations for traders in India.

Expert advice

• PIPs are essential for measuring market movements and managing risk in Forex trading.
• Understanding PIP values helps traders set realistic profit targets and stop-loss levels.
• Our PIP Calculator simplifies your calculations and helps you trade smarter.

Try our free PIP Calculator today and start making better trading decisions! 

How Much is 1 PIP in 1 Lot?

The value of 1 PIP in 1 lot depends on the currency pair and the lot size you are trading.

PIP Value Formula

PIP Value = (PIP Change × Lot Size) ÷ Exchange Rate

Standard PIP Values for Major Currency Pairs:

1 PIP Value in USD/INR (Standard Lot)

• Currency Pair: USD/INR
• Lot Size: 1 Standard Lot (1,00,000 units)
• Exchange Rate: ₹82.50
• PIP Movement: 0.0001

PIP Value = (0.0001 × 1,00,000) ÷ 82.50 ​= ₹12.12 per PIP

So, for every 1 PIP movement in USD/INR, a trader with 1 Standard Lot will make or lose ₹12.12.

For other currency pairs, the PIP value varies based on the exchange rate. Most Forex platforms automatically calculate PIP values, but knowing this formula helps with risk management and position sizing.

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.