Check the quote convention

Many non-yen pairs use 0.0001 per pip, while yen pairs commonly use 0.01. Platforms may show fractional pips. The last displayed digit is therefore not automatically one pip; consult the instrument specification.

Size determines monetary value

For an illustrative EUR/USD position, 10,000 euros gives approximately one dollar per pip; 1,000 euros gives about ten cents. The same twenty-pip move therefore has different monetary effects.

Convert to the account currency

When the quote currency differs from the account currency, conversion is needed. Add trading costs separately. Keeping price difference, pips, quantity and money in separate fields helps identify unit errors.

Check the unit conversion

An illustrative EUR/USD change from 1.0700 to 1.0715 is 0.0015, or fifteen conventional pips. With five displayed decimals, distinguish the last digit from a pip. Confirm the unit before multiplying by quantity so that a tenfold conversion error does not enter the result.

Source and reading notes

This is an independently written educational overview based on the ATFX reading linked below. Examples are illustrative, not live quotes or forecasts. It does not reproduce the original article or imply endorsement by its author.