• By CFD Trading
• 2025-10-02 16:22

What is the Standard Pip Size for Different Currencies?

“Know your pips, know your profits.”

Ever looked at a forex chart and thought, “Okay, EUR/USD moved… but what does that actually mean for my account?” That’s where pips step in—the tiny units that measure price changes in the currency market. Whether you’re trading with your own funds or in a prop trading environment, understanding pip size isn’t just technical—it’s the difference between knowing your risk and throwing darts in the dark.

Understanding Pip Size in Plain English

A “pip” stands for percentage in point or price interest point. It’s the smallest unit of price movement that most currency pairs are quoted in. Think of it like millimeters in carpentry—small on its own, but when you add them up, they decide whether the table is perfectly balanced or totally wobbly.

• Most major currency pairs (like EUR/USD, GBP/USD, AUD/USD) have a standard pip size of 0.0001 for a single unit. So if EUR/USD moves from 1.1000 to 1.1001, that’s one pip.
• JPY pairs (like USD/JPY, EUR/JPY) are the exception—the pip is 0.01, because the yen’s value is much smaller per unit.

And in actual dollars? If you’re trading a standard lot (100,000 units) in EUR/USD, one pip is usually worth $10. If it’s a mini lot (10,000 units), it’s $1 per pip. Micro lot (1,000 units)? Just $0.10 per pip.

Why It Matters in Prop Trading

Prop trading firms live and breathe precision. You’re often dealing with strict risk limits, profit targets, and drawdown rules. Misjudging how much a one-pip move affects your P&L can be the fastest route to breaching your limit.

Example: You enter a GBP/USD trade at 1.3000. Price moves to 1.3015. That’s 15 pips. In a standard lot, that’s $150 in your favor—or against you if it goes the other way. Multiply that by several active trades and you see how quickly tiny price movements turn into big account swings.

Pip Size Across Asset Classes

The concept of “pip” is unique to forex, but every market has its own smallest measurable movement:

• Stocks: One “tick” is usually $0.01 change in share price.
• Cryptos: Price moves can be measured in satoshis for Bitcoin, or fractions of a cent for altcoins.
• Indices: Each point in an index may carry fixed monetary value in CFDs or futures (e.g., S&P 500 futures often value one point at $50).
• Commodities: Gold, oil, and silver are quoted differently—gold (XAU/USD) moves in increments of $0.01, while crude oil contracts tick in $0.01 per barrel in futures.
• Options: Premiums are quoted per share, so a $0.05 change in premium is $5 for a standard US equity option (100 shares).

In multi-asset prop trading, you’re constantly switching mental units. Understanding pip equivalents helps normalize your risk across wildly different markets.

Advantages of Mastering Pip Sizes

1. Smarter Risk Management You know exactly how much you’re risking per move before placing a trade.

2. Better Position Sizing Pip values guide your lot count so you stay within daily or weekly loss caps.

3. Confidence in Strategies Traders who calculate in pips aren’t guessing—they’re playing a numbers game they understand.

Prop traders often keep quick-reference sheets where they jot down pip values for each currency pair they trade. It’s like having a chef’s spice chart—you don’t have to guess how much flavor you’re adding.

The Decentralization & AI Angle

As DeFi (Decentralized Finance) rises, trading isn’t limited to centralized brokers anymore. Liquidity pools, smart contracts, and blockchain-based exchanges offer forex-like pairs—including stablecoin vs fiat or crypto-to-crypto. Pip-equivalent measurements still matter, but the volatility dynamics shift radically.

AI-driven trading is already merging with pip-based strategies—bots can scalp half-pip movements across multiple pairs in milliseconds. For prop trading futures, this means human traders may focus more on strategy oversight, market selection, and real-time risk decisions, while algos handle execution precision.

Challenges & Future Trends

• Responsive pricing in volatile markets: Crypto-FX pairs can move dozens of pips in seconds, so position sizing becomes crucial.
• Smart contracts: Automated settlements can be pip-perfect—no rounding errors, no manual miscalculations.
• AI: Machine learning engines can detect micro-patterns in pip movements long before human traders notice them.

The future? Hybrid prop desks combining human macro strategies with AI micro execution—where pip precision is the glue between brain and machine.

Slogan to Remember

“Count your pips before they count you.”

No matter the market—forex, stocks, crypto—pip-equivalent awareness turns price noise into actionable data. In prop trading, it’s one of the rare skills that still separates pros from hopefuls.

If you want, I can also make you a visual cheat sheet comparing pip values across major currency pairs, so you can reference it mid-trade without doing math every time. You want me to do that?