How to Calculate Pip Value
What Is a Pip?
A pip is the smallest price change in forex, usually 0.0001 for most pairs (e.g., EUR/USD) and 0.01 for JPY pairs (e.g., USD/JPY). For Sudan traders, pip value is always calculated in your account currency (USD).
The Formula for Pip Value
Pip Value = (One Pip / Exchange Rate) × Lot Size. For a standard lot (100,000 units) of EUR/USD at 1.1000: (0.0001 / 1.1000) × 100,000 = $9.09. For a mini lot (10,000 units): $0.909. For a micro lot (1,000 units): $0.0909.
Example for Sudan Traders
Suppose you trade USD/SDG (Sudanese Pound) — though most brokers quote USD pairs. If you trade 0.1 lot (10,000 units) of GBP/USD at 1.2500, pip value = (0.0001 / 1.2500) × 10,000 = $0.80. If the price moves 50 pips, your P&L is $40. Using USDT deposits, ensure your broker converts at fair rates.
Impact of Leverage
Leverage multiplies pip value exposure. In Sudan, the local financial authority may limit leverage to 1:30 for retail traders. Higher leverage increases pip value risk, so always calculate position size based on your account balance.