Pip Value

Pip value is what a one-pip move is worth in money for a given position size — the figure that turns a price move into a profit or loss. For a pair quoted to four decimals it is the position's notional size multiplied by 0.0001, expressed in the quote currency, then converted into the account's base currency when the two differ. On a standard lot of EUR/USD that is 100,000 × 0.0001 = $10 per pip; on a mini lot, $1; on a micro lot, $0.10. Yen pairs use 0.01 instead, and it is the conversion step that makes the pip value of a pair like EUR/GBP drift slightly as GBP/USD moves. It is the number position sizing runs on. A stop 25 pips away on a position worth $10 a pip risks $250, so the size that fits a chosen risk per trade is the risk amount divided by the stop distance in pips, divided by the pip value per lot. Platforms show it in the contract specification and in the order ticket, but working it out by hand once for the account's base currency is what makes an unexpected loss recognisable as a sizing error rather than as a market event.