Forex Position Size, Pip Value & Risk Calculator

What is a forex pip?

A pip is the price step this calculator uses. On many pairs that step is 0.0001. On many yen quotes it is 0.01. A pipette, sometimes called a fractional pip, is usually one tenth of that step: 0.00001, or 0.001 on a yen quote. A broker can quote a finer or a coarser increment. The pip field is yours to edit, and the usual figure for the quote currency is only a starting point.

Understanding currency pairs

The base currency is the currency being bought or sold. The quote currency is how that price is expressed. EUR/USD at a rate you type means that many US dollars for one euro. The account currency is the currency of the balance. It can match the quote, match the base, or be a third currency. The pair label is built from the two selectors. Both sides cannot be the same currency.

Understanding forex lot sizes

A standard lot on this page is 100,000 units of the base currency, unless you type another contract size. A mini lot is 10,000 and a micro lot is 1,000 under that default. You can also type base-currency units directly. The lot table shows the pip value and the stop risk of each convention and can place that size in the form. It does not change the risk budget. A currency CFD or a futures contract can use a different size. Type that size before you treat the result as the contract you trade.

How pip value is calculated

Pip value in the quote currency is the number of base units times the pip size. When the account currency is the quote currency, that amount is already the account pip value. When the account currency is the base currency, the quote amount is divided by the pair rate you type, because that rate is quote currency per one unit of base currency. When the account is a third currency, you type how many account units equal one quote unit. If you typed the inverse, say so and the page inverts it. A missing rate leaves the quote pip value in place and leaves the account figures blank.

Position sizing by risk budget

A percent budget is the balance times the percent. A fixed budget is the money amount you type. Changing mode does not overwrite the other field. The budget, after any fixed commission and financing, is divided by the account-currency risk of one base unit over the stop, the spread you have not already included, and the slippage. The result is rounded down to the increment. The modelled risk is then recalculated. A wider stop, with the same budget, fits a smaller position. That is arithmetic. It is not a view on where the stop should sit.

Leverage and margin

Notional exposure is the account-currency value of the base units, using the rate the case requires. Indicative margin divides that notional by the leverage you type. Leverage increases the notional a given margin can support, and it increases the loss a given price move can produce. The margin figure is collateral in a simplified model. It is not a fee, it is not the most you can lose, and it is not a statement that a broker or a regulator offers that leverage on this pair.

Currency conversion

Direct conversion applies when the account currency is already the quote currency. Inverse conversion applies when the account currency is the base currency: the pair rate is divided into the quote pip value. A cross-currency account needs a rate you supply between the quote currency and the account currency. The page does not construct that rate from other pairs. Stop-rate mode is offered only when the traded pair itself is the conversion, so a hypothetical stop on EUR/USD can restate a dollar result in euros. It does not predict the rate.

Trading costs

A spread in pips is added to the stop unless you mark the stop distance as already including it, so the spread is not counted twice. Commission is either a round-turn total or an amount per standard lot. Slippage is extra adverse pips. Financing is a cash amount you type, with no rollover table behind it. The result separates the price stop from those costs. A live fill can cost more or less.

Common mistakes

• Reading a mini lot as a standard lot, or the reverse.
• Treating a pipette as a full pip.
• Multiplying by a rate that was quoted in the other direction.
• Assuming every pip on every pair is worth 10 units of account currency.
• Leaving the account currency on a currency the balance is not held in.
• Sizing the position without a stop distance.
• Ignoring the spread, the commission and slippage.
• Reading leverage as the risk of the trade. The risk model is the stop, the size and the costs.
• Treating the stop loss as a guaranteed exit.
• Assuming every broker applies the same margin to the same pair.

Worked examples

Example A uses EUR/USD, a USD account, 10,000 euro of size, a pip of 0.0001, a 25 pip stop, a balance of 10,000 and a 1% budget, with no costs and an increment of 1. Pip value is USD 1.00. Risk at that typed size is USD 25.00. The budget is USD 100.00. The risk-based size is 40,000 euro, which is 0.40 standard lots.

Example B keeps that 10,000 euro size and that pip, and changes the account to EUR with a typed EUR/USD reference of 1.10. The figure 1.10 is a hypothetical rate for the division, not a live quote. Pip value in dollars is USD 1.00. Pip value in euros is EUR 0.9091.

Example C uses EUR/GBP and a USD account. Pip value is first GBP 1.00 at 10,000 euro and a pip of 0.0001. If you then type 1.25 US dollars per 1 pound, the account pip value is USD 1.25. The 1.25 figure is an input in this illustration. It is not a market rate and it is not filled in for you.

Assumptions and limitations

The workspace builds a pair from a base currency and a quote currency, then prices one pip in the quote currency and, when you have supplied the rate the case needs, in the account currency. A percent of the balance, or a fixed money amount, becomes the risk budget. The suggested size is that budget divided by the stop, the pip value and the costs you type, rounded down so the modelled risk stays inside the budget.

How the calculation works

Pip value in the quote currency is base units times the pip size. If the account currency is the quote currency, that figure is the account pip value. If the account currency is the base currency, the quote figure is divided by the pair rate you type, because the rate is quote per one base. A third-currency account needs the account units per one quote unit, or the inverse if you say the typed rate runs the other way. A missing rate is left missing. The risk budget is balance times the percent, or the fixed amount. Fixed commission and any financing you type are removed before the division. Spread, unless you say the stop already includes it, and slippage are extra pips on each unit. Size is rounded down to the increment and the risk is recalculated. Notional in the account currency uses the pair rate when the account is the quote, the units themselves when the account is the base, and a base-to-account rate you type otherwise. Indicative margin is that notional divided by leverage, only when both exist. A long gain is a rise in the rate. A short gain is a fall. The chart uses the same pip value.

Assumptions

• Every exchange rate is typed. None is fetched, and a missing cross rate is not invented.
• The usual pip is 0.0001, or 0.01 when the quote is yen. You can replace it.
• A standard lot is 100,000 base units until you type another contract size. Mini and micro scale from that unit. The convention is not applied to a futures contract.
• The stop fills at the distance you typed. A gap can make the loss larger.
• Commission is a round-turn total or an amount per standard lot, not both. Financing is only the cash amount you type.
• Leverage is used only as notional divided by leverage. That margin is collateral in the model, not a loss limit and not a broker quotation.

A worked example

EUR/USD, a USD account, 10,000 units, a pip of 0.0001, a 25 pip stop, a balance of 10,000 and a 1% budget, with no costs. Pip value is 1 dollar. Risk at that size is 25 dollars. The budget is 100 dollars. The suggested size is 40,000 units, or 0.40 standard lots. The same size with an EUR account and a typed pair rate of 1.10, a hypothetical figure, is about 0.9091 euro per pip. EUR/GBP in a USD account keeps the pound pip value until you type a pound-to-dollar rate.

Limitations

The figures are the arithmetic of the inputs. They are not a live quote, a broker margin schedule, or a view on a currency. A stop order does not cap the loss. Leverage available on a pair depends on the broker, the product and the jurisdiction. The time on an export is when the file was generated, not an exchange-rate observation.

Change one input at a time if a result looks surprising. The arithmetic is only as careful as the numbers you type, and it does not know your broker’s contract size.

Forex Position Size, Pip Value & Risk Calculator recalculates as you type. Reset restores the starting figures on that page. Those figures are an illustration of the arithmetic, not a market observation and not a record of anyone’s account. Copy and export repeat the same rounded results. Cash amounts on screen are shown to two decimal places. A conversion, a margin schedule, or a programme rule that you leave blank is not invented. A zero divisor, a stop on the wrong side of an entry, or a target-weight total other than 100 percent produces a written explanation instead of a blank or infinite number.