ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Calculating Pip Value When your forex account is funded with U.S. dollars and USD is the second of the pair (or the quote currency), such as with the EUR/USD pair, the pip is fixed at . 0001. In this case, the value of one pip is calculated by multiplying the trade value (or lot size) by 0.0001.

Detailed explanation-2: -All over the world, currency is quoted till the 4th decimal point. This is called PIP or point in percentage and is fixed at 0.0025 for USD INR. It is also called tick size.

Detailed explanation-3: -This would make one pip equal to 1/100th of a percent, or one basis point. For example, if the currency price we quoted earlier changed from 1.1200 to 1.1205, this would be a change of five pips. 2 A currency pair such as EUR/USD, for example, represents the relationship between the euro and U.S. dollar.

Detailed explanation-4: -To calculate pip value, divide one pip (usually 0.0001) by the current market value of the forex pair. Then, multiply that figure by your lot size, which is the number of base units that you are trading.