In Module 1 you learned that a pip on EUR/USD is worth $10 per standard lot. That shortcut only works when your account is in US dollars and the pair is quoted in US dollars. For every other combination, you need the full calculation. It takes ten seconds and prevents the most expensive sizing mistakes.
The three cases (for a US dollar account)
| Case | Example | Pip value per standard lot |
|---|---|---|
| USD is the quote currency | EUR/USD, GBP/USD, AUD/USD | $10, fixed |
| USD is the base currency | USD/JPY at 150.00, USD/CHF at 0.8800 | ¥1,000 ÷ 150 = $6.67; CHF 10 ÷ 0.88 = $11.36 |
| No USD in the pair | EUR/GBP, with GBP/USD at 1.2700 | £10 × 1.27 = $12.70 |
Worked example: a euro account
Your account is in euros. You trade 1 standard lot of EUR/USD, with EUR/USD at 1.0850.
Pip value in the quote currency = 0.0001 × 100,000 = $10.
Converted to euros: $10 ÷ 1.0850 = €9.22 per pip. A 25-pip stop risks about €230.
Worked example: GBP/JPY
Account in US dollars. 0.5 lots of GBP/JPY. USD/JPY is at 150.00.
Pip value = 0.01 × 50,000 = ¥500. Converted: ¥500 ÷ 150 = $3.33 per pip.
Why it changes
Whenever the quote currency isn't your account currency, pip value moves with the exchange rate. The effect is small day to day, but over a long swing trade or a big move in USD/JPY it can shift your risk noticeably. Recalculate when you size each new trade.
Key takeaways
- Pip value = pip size × units, in the quote currency.
- Convert it into your account currency at the current exchange rate.
- For a USD account, pairs quoted in USD are $10 per pip per standard lot; others vary.
- Pip value moves with exchange rates, so recalculate when you size each trade.