What Are Pips?
September 20th 2010 Posted at Forex
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If a trader tells you that they made a hundred pips profit, you don’t learn anything about their money situation. If they are trading a pair like EUR/USD where the dollar is the quote currency, 100 pips profit would be $1,000 on a standard lot of $100,000 but only $10 on a $1,000 micro lot. To know the scale of one pip in dollars in this scenario multiply 0.0001 by the lot size.
To calculate profit or loss from pips where the dollar is the quote currency, you only need to grasp that one pip is $0.0001 x lot size. If you have another currency as the quote currency, the pip is of course in that currency, and you can multiply by the exchange rate to grasp the pip value in greenbacks.