What Is Pip Value in Exness

Exness pip value informs you about the effect of a pip change on the value of your position in any of the pairs traded. Pip value is a separate concept that tells you how much you have won or lost. It’s a critical tool for risk management and informed trading decisions.

What is a pip in trading?

How is a pip value calculated on Exness?

To calculate the pip value on Exness, you need to know the following:

1. Position size: This refers to how much of a currency pair you’re trading. For example:
   • Micro lot = 1,000 units
   • Mini lot = 10,000 units
   • Standard lot = 100,000 units
2. Currency pair exchange rate: This is the price of the currency pair you are trading. For example, if EUR/USD is 1.1200, it means 1 Euro equals 1.1200 USD.
3. Pip value formula:
   • For most currency pairs (not involving JPY), you can calculate pip value using this simple formula:
4. Pip Value=Pip Size×Position SizeExchange Rate\text{Pip Value} = \frac{\text{Pip Size} \times \text{Position Size}}{\text{Exchange Rate}}Pip Value=Exchange RatePip Size×Position Size​
   For instance, if you’re trading a standard lot (100,000 units) of EUR/USD with an exchange rate of 1.1200, each pip movement would equal $10.
5. For JPY pairs: If you are trading pairs with the Japanese yen, the pip size is 0.01, and the formula is slightly adjusted.

By following these steps, you can calculate how much each pip movement will affect your account balance.

How does a pip value affect profit/loss?

The pip value directly impacts how much profit or loss you make from a trade. The bigger the pip value, the more you gain or lose as the price moves.

For example:

• If the price moves 50 pips against you, your loss would be $500.
• If your pip value is $10 (like in a standard lot trade with EUR/USD), and the price moves 50 pips in your favor, you would make $500 profit.

Understanding pip value helps you plan your trades better, set realistic profit and loss goals, and manage your risk effectively.

Examples of calculating pip values

Let’s look at two examples of how to calculate the pip value for different currency pairs.

The importance of understanding pips for risk management

Understanding pips is important for managing risk in trading. Here’s why:

1. Helps Calculate Profit and Loss

If you know how much a pip is worth then you can calculate exactly how much you are going to gain or lose from any given price move. It lets you place effective stop-loss and take profit orders to safeguard your trade.

2. Control Over Position Size

The pip value changes based on your position size.If you trade larger lots, then your pip value is higher, and thus your potential profit or loss is larger. Once you know this, you can scale your position size appropriately to your risk tolerance.

3. Avoid Over-risking

Without knowing the pip value, you might risk more than you want to. If you don’t calculate pip value, you could end up with bigger losses than you expected. Understanding pips helps you stay within your risk limits.

4. Better Risk-to-Reward Decisions

The pip value will also help you calculate the risk to reward ratio. So if you have a stop-loss 100 pips away from your entry but then you only target 50 pips profit, this trade might not be a good idea. Knowing how pips work will allow you to assess trades with a good reward to risk ratio.

In summary, understanding pip values helps you manage risk, protect your trades, and make better decisions about position size and stop-loss levels. This is key to successful and safe trading.

FAQs

How does pip value change based on trade volume?

The pip value increases when you trade a larger position. As described above, with a larger lot size, the pip value increases. The pip value, for example, will be bigger if you are trading a standard lot (100,000 units) than a mini lot (10,000 units) or a micro lot (1,000 units). Essentially, the more you trade, the higher your pip value.

How can I check pip value for different currency pairs on Exness?

You can use the Trading Calculator to find out the pip value for any currency pair on Exness. The answer is directly through the Trading Calculator of Exness after logging into your Exness account via the Trading Tools section. Next enter, the currency pair, the currency of your account, and the size of your trade. The calculator will show you the pip value for that trade. It’s an easy way to find pip values before placing your trades.

Is it possible to set up automatic pip calculation on the Exness platform?

Exness doesn’t have an automatic pip calculation feature built into the platform. But, can also check the pip value manually by using the Trading Calculator on their website. You can probably get a custom indicator or script to add to your MT4 or MT5 platform that will automatically calculate pip values while you start reading.

How does volatility affect pip value and profitability?

So volatility is how much the price of a currency pair moves. Since price moves faster and more during high volatility, so does pip values. That means you could make bigger profits, but you could also suffer bigger losses. If there is less volatility and price does not move that much, then pip value is lower. This decreases both the possible profit and risk. Knowledge of volatility informs adjustments in strategy to control risk and profit from price movements.

You may also be interested in:

• Hedging Strategies with Exness
• Fixing the “Only Position Closing is Allowed” Error on Exness
• How to Transfer Funds from Binance to Exness