Forex pip value and lot size, step by step
How to calculate exact pip value, standard/mini/micro lot size and spread cost for EUR/USD, USD/JPY, cross pairs and spot Gold (XAU/USD).
What Is a Pip and How Do Lot Sizes Work?
In foreign exchange, a pip ("percentage in point") is the standard unit of price movement: 0.0001 for most currency pairs (EUR/USD, GBP/USD, AUD/USD) and 0.01 for Japanese Yen pairs (USD/JPY, EUR/JPY). Contract sizes are standardized globally:
| Lot Type | Lot Volume | Base Units | Pip Value on EUR/USD (USD Account) |
|---|---|---|---|
| Standard Lot | 1.00 | 100,000 units | $10.00 / pip |
| Mini Lot | 0.10 | 10,000 units | $1.00 / pip |
| Micro Lot | 0.01 | 1,000 units | $0.10 / pip |
Step-by-Step Lot Sizing Formula
- Compute your cash risk budget: On a $10,000 USD account risking 1%,
riskAmt = $100.00. - Measure stop distance in pips: Entering
EUR/USDat1.0800with a stop at1.0770gives(1.0800 − 1.0770) ÷ 0.0001 = 30 pips. - Divide risk by (pips × pipValuePerLot) and round down to 0.01 step:
floorToStep($100 ÷ (30 × $10), 0.01) = 0.33 lots, giving an exact cash risk of $99.00. Plan your next currency trade visually in the Forex Trade Planner or check currency conversion in our FX Net P&L Converter.
Frequently asked questions
Can I test these formulas interactively on a live chart?
Yes. Open the TradeProfy Studio Trade Planner (/studio/trade-planner.html) to drag Entry, Stop and Target levels on a candlestick chart and see instant sizing and net R:R.
Are these calculations financial or investment advice?
No. All examples are strictly for educational risk-management and trade-cost mathematics.
Written and maintained by Mantu Kumar
Mantu builds TradeProfy’s calculation engines and checks every formula with worked examples and lists the sources and assumptions on each page. TradeProfy is an educational maths and risk-planning platform and never tells you what to buy or sell.
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