Pip calculator

By:

James Knight

James is a lead editor for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets. His ... read more.

Updated: Oct 11, 2022

Listen

---

---

0:00 / 01:33

Ad disclosure

Invezz is an independent platform with the goal of helping users achieve financial freedom. In order to fund our work, we partner with advertisers who compensate us for users that Invezz refers to their services. While our reviews and assessments of each product on the site are independent and unbiased, brands may pay to appear higher up our table rankings or place ads in specific areas of the site. The order in which products and services appear on Invezz does not represent an endorsement from us, and please be aware that there may be other platforms available to you than the products and services that appear on our website. Read more about how we make money >

One of the Invezz calculators, called pip calculator is designed to quantify what each pip means when you’re a trader seeking to make a profit in the forex market. Keep reading to see how our pip calculator works.

How to use our pip calculator

To use our pip calculator, follow these steps:

• Enter in the currency pair you plan to trade (for instance GBP/USD).
• Enter the currency you’ve deposited into your account that you use to trade.
• Enter the ask price on the trade you’re planning to execute.
• Enter the size of the position you plan to take.
• Click calculate, and our calculator will tell you the value of each pip.

How the pip calculator works

Our pip calculator uses up-to-date foreign currency exchange rates and the ‘ask’ price of a trade to calculate how much each pip is worth for a forex trader in the currency your using to make your trades.

Why should I use it?

Spreads matter a lot for forex traders, who often find success simply by realising small profits on their trades when use spread betting forex brokers. That’s why it’s important to know the precise value of a pip for your planned trade, so you know exactly the price you’re paying and what the spread on that trade means for your budget and your portfolio.

What is a pip? 

A pip measures the spread between the bid and ‘ask’ prices in the exchange rate for a currency pair being traded on the foreign exchange (forex) market. Most currency pairs are calculated to four decimal places, and pips are calculated using the last decimal point.