PIP Calculator: Calculate Pip Value Online

The foreign exchange market (Forex) is the largest financial market in the world, with trillions of dollars traded every day. For traders in New Zealand, understanding PIPs (Percentage in Point) is crucial, as PIPs measure price changes in currency pairs and help determine potential profits and losses in trading.

To make it easier, we offer a free PIP Calculator—a tool that quickly determines PIP values so you can manage risk, optimise trades, and make smarter trading decisions.

What is a PIP in Forex?

A PIP (Percentage in Point) is the smallest price movement a currency pair can make in most forex trading platforms.

For most currency pairs, a PIP is equal to the fourth decimal place of an exchange rate.

For example

If the NZD/USD exchange rate moves from 0.6125 to 0.6140, that’s a 15 PIP change.

Since forex markets move quickly, PIPs provide a standardised way to measure price changes efficiently.

Why Are PIPs Important in Forex Trading?

PIPs play a key role in:

• Calculating profits and losses – PIPs help traders measure how much they gain or lose per trade.
• Managing risk – Traders set stop-loss and take-profit levels using PIPs.
• Understanding spreads – Brokers charge fees through spreads, which are measured in PIPs.

What Is a Spread in Forex?

A spread is the difference between the buy price (bid) and sell price (ask) of a currency pair. This is how brokers make money instead of charging direct commissions.

For example

If the NZD/USD buy price is 0.6135 and the sell price is 0.6133, the spread is 0.0002 (or 2 PIPs).

A lower spread means lower trading costs.

How Do PIPs Work with the Japanese Yen (JPY)?

For most currency pairs, a PIP is the fourth decimal place (e.g., 0.0001). However, Japanese Yen (JPY) pairs are an exception because they are priced differently.

For JPY pairs, a PIP is measured at the second decimal place (e.g., 0.01 instead of 0.0001).

For example

If NZD/JPY moves from 85.60 to 85.85, that’s a 25 PIP movement.

What Is Forex Pair Volatility?

Volatility refers to how much a currency pair moves in PIPs over a certain period, such as a day.

More volatile pairs experience bigger price swings, creating both profit opportunities and risks.

Formula for Volatility:

Volatility = Highest price – Lowest price

For example

If NZD/USD reaches a high of 0.6185 and a low of 0.6145, the daily volatility is:

0.6185 - 0.6145 = 40 PIPs

What Are The Types of Forex Currency Pairs?

Forex currency pairs are categorised into Major Pairs, Minor Pairs, and Exotic Pairs. Understanding these categories is crucial for traders, as different pairs have different levels of liquidity, volatility, and trading costs.

Major Pairs

Major pairs are the most traded currency pairs in the world and always include the US dollar (USD). These pairs have high liquidity, tighter spreads, and lower trading costs.

Examples of Major Pairs:

• NZD/USD – Represents the exchange rate between the New Zealand dollar and the US dollar. It is influenced by Reserve Bank of New Zealand (RBNZ) interest rate decisions and dairy export prices.
• EUR/USD – The most traded currency pair globally, reflecting the relationship between the Eurozone and the US economy.
• USD/JPY – One of the most liquid forex pairs, affected by Japan’s monetary policy and global risk sentiment.

Major pairs generally have lower volatility and tighter spreads, making them cheaper to trade.

Minor Pairs (Cross Currency Pairs)

Minor pairs, also known as cross currency pairs, do not include the US dollar (USD). They involve other major currencies such as the Euro (EUR), British Pound (GBP), and Australian Dollar (AUD).

Examples of Minor Pairs:

• EUR/GBP – The exchange rate between the Euro and the British pound.
• AUD/NZD – The exchange rate between the Australian dollar and the New Zealand dollar.
• EUR/JPY – The exchange rate between the Euro and the Japanese yen.

Minor pairs tend to have higher volatility and wider spreads than major pairs.

Exotic Pairs

Exotic pairs include one major currency and one currency from an emerging or smaller economy. These pairs are less liquid and have higher trading costs due to wider bid-ask spreads.

Examples of Exotic Pairs:

• NZD/SGD – New Zealand dollar vs. Singapore dollar.
• USD/THB – US dollar vs. Thai baht.
• EUR/TRY – Euro vs. Turkish lira.

Exotic pairs experience larger PIP movements and are riskier for traders due to high volatility.

How to Calculate the Value of a PIP in Forex?

The value of a PIP depends on the currency pair and trade size.

Formula:
PIP Value = (PIP Change × Lot Size) ÷ Exchange Rate

For example

If NZD/USD moves from 0.6220 to 0.6221 (1 PIP change):

• Lot size = 100,000 units
• Exchange rate = 0.6221

PIP Value = (0.0001 × 100,000) ÷ 0.6221 = $16.07 NZD

Forex trading platforms automatically calculate PIP values, but understanding them helps with risk management.

How to Use Our Forex PIP Calculator?

Calculating PIPs manually can be time-consuming. That’s why we offer a free PIP Calculator to help traders instantly determine their profit or loss on any trade.

How It Works:

• Enter the number of PIPs moved
• Select the currency pair (e.g., NZD/USD)
• Enter the trade size (lot size)
• Choose your deposit currency

Click "Calculate" to see the exact PIP value for your trade.

How Do PIPs Impact Your Trading Risk?

While PIPs measure market movements, trading with high leverage can magnify both profits and losses.

Key Risk Factors:

• Leverage Increases Risk – Higher leverage means larger position sizes, increasing profit/loss per PIP movement.
• Market Volatility – Sudden price swings can cause rapid PIP movements and unexpected losses.
• Holding Overnight – Keeping positions open overnight may result in swap fees, affecting overall profitability.

How Do News & Events Impact PIP Movements?

Major economic events can cause large PIP swings, impacting forex trading.

Key Events That Affect PIP Volatility:

• Reserve Bank of New Zealand (RBNZ) Interest Rate Decisions – Rate changes can move NZD pairs by 100+ PIPs.
• Employment Reports – New Zealand job data can trigger 50-100 PIP price swings in NZD pairs.
• GDP & Inflation Reports – Economic data affects currency demand, influencing PIPs.
• US Federal Reserve Announcements – Fed policy decisions can impact global forex markets.

Expert advice

Trading during major news releases increases volatility—always use stop-loss orders to manage risk.

PIPs aren’t just technical measurements—they are essential for making informed trading decisions. By understanding how PIPs work, traders can:

• Minimise risk
• Maximise profits
• Develop a long-term forex strategy

To simplify your trading, use our free PIP Calculator to quickly determine PIP values, manage risk, and optimise your trades with confidence.

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.