Let’s take an example and stick with our EURUSD pair. We can forget what price it is trading at for now and we’ll concentrate on how much money a pip move will be for various position sizes.

So say we wanted to open a position size of 10,000 units.

Our calculation to establish what a one pip movement means to us is as follows:

**10,000 (units) * 0.0001 (one pip) = $ 1 per pip**

So a position of 10,000 (BUY or SELL) means that every time the pair moves 0.0001 (i.e. ONE PIP) then we will make a profit or loss of $1.00 depending on which way it moved.

Therefore, for a position of this size – 10,000 units – we will gain or lose $1 for every pip movement in either direction. So if the EUR/USD moves 100 pips (i.e. 1 cent) in our direction we will make $100 profit.

We can do this for any trade size. The calculation is simply the trade size times 0.0001 (1 pip).

**5,000 (units) * 0.0001 (one pip) = $ 0.50 per pip**

**60,000 (units) * 0.0001 (one pip) = $ 6 per pip**

**123,000 (units) * 0.0001 (one pip) = $ 12.30 per pip**

Our pip value **WILL ALWAYS BE MEASURED IN THE CURRENCY OF THE QUOTE CURRENCY OF THE FX PAIR **i.e. the currency on the right-hand size of the pair.

So in the example of the EURUSD we see our pip value is always in US Dollars.

If we were trading the EURGBP pair, the pip value will be in Pound Sterling.

So…

**10,000 units * 0.0001 = ****£ 1.00 per pip**

Therefore the final calculation we must consider is if we have a trading account in a different currency denomination, as brokers offer accounts in US Dollar, Euro, Pound and Yen.

So let’s say we have a Euro platform taking our EURGBP example above and the current EURGBP exchange rate is 1.5000.

Then each pip movement of 1.00 would be automatically converted by our broker to – we simply divide 1$ by the current EURUSD rate which is 1.26500 which equals 0.79c.

If we are using a GBP platform one pip will equal 1$/1.59500 (the GBPUSD rate) or 0.63 pence.

These calculations will be done automatically on our trading platform but it is important to know how they are worked out.

At this point you may be asking ‘how can I trade such large positions such as 10,000 units of a currency pair? That sounds like a very large investment!’ The answer to that question is *leverage* which we will discuss in another article.