You can calculate the pip value by multiplying one pip (0.0001) by the lot/contract size. There will be 100,000 units of the basic currency for normal lots and 10,000 units for micro-lots. In the EUR/USD currency pair, a one-pip fluctuation in a typical contract is equal to $10. (0.0001 x 100 000).

The value of a single pip allows forex traders to assign a monetary value to their take profit and stop-loss targets. Rather than focusing only on pip fluctuations, traders can predict how the value of their trading account (equity) will change as a result of currency market movements.

Remember that the value of a pip varies between currency pairs. The value of a pip is always displayed in the quote/variable currency, which differs when trading multiple currency pairings. When trading EUR/USD, the pip value is displayed in USD; when trading GBP/JPY, the pip value is displayed in JPY.