- number of pips
- lot size used
- currency pair
- deposit currency
Why do you need GBPUSD pip value calculator?
You can calculate the value for a number of pips. And that means for example if you have 100 pips as a stop loss or take profit set, then you can calculate how much that will be in terms of a currency you select.
How to use GBPUSD pip value calculator?
Inside the calculator you have several fields you need to fill with the data. And those are the number of pips, currency pair, deposit currency and lot size. At the end you click the button Calculate and you get the value of a pip.
In this article I will show you all details you need to know about GBPUSD pip value calculator and what you can get with using it, why you should use it to speed up the process of calculating pip value and how to use it so you do not get confused when looking at pip calculator.
Read more: What is Pip Value Calculator
Contents
GBPUSD Pip Value Calculator Example
The best way to explain how the GBPUSD calculator works is to show an example. I will make a few examples so you can see the difference in calculations.
First example is when you have GBPUSD currency pair with GBP as a deposit currency:
- Number of pips: 1
- Instrument: GBPUSD
- Lot size: 1.00 (100,000 units)
- Deposit currency: GBP
- GBPUSD pip size: 0.0001
Second example is when you have GBPUSD currency pair with USD as a deposit currency:
- Number of pips: 1
- Instrument: GBPUSD
- Lot size: 1.00 (100,000 units)
- Deposit currency: USD
- GBPUSD pip size: 0.0001
How to Calculate Pips for GBPUSD
To calculate pips for GBPUSD you need to use following formula which defines the pip value:
For deposit currency which is equal to base currency, GBP:
Pip value = (Pip / Current market price) x Lot size
For deposit currency which is equal to quote currency, USD:
Pip value = Pip x lot size
GBPUSD Pip Value
Now with the formula you have you need to use the first formula where the deposit currency is GBP.
Pip Value for Base Currency
For deposit currency which is equal to base currency, GBP, pip value will be equal to:
Pip value = (Pip / Current market price) x Lot size
Here are other data you need:
- Number of pips: 1
- Instrument: GBPUSD = 0.8246
- Lot size: 1.00 (100,000 units)
- Deposit currency: GBP
- GBPUSD pip size: 0.0001
Now, when you put all the data in the formula you get:
Pip value = (Pip / Current market price) x Lot size
Pip value = (0.0001 / 0.8246) x 100,000
Pip value = (1.213e-4) x 100,000
Pip value = 12.13
Pip Value for Quote Currency
For deposit currency which is equal to quote currency, USD, pip value will be equal to:
Pip value = Pip x Lot size
Here are other data you need:
- Number of pips: 1
- Instrument: GBPUSD = 0.8246
- Lot size: 1.00 (100,000 units)
- Deposit currency: USD
- GBPUSD pip size: 0.0001
Now, when you put all the data in the formula you get:
Pip value = Pip x Lot size
Pip value = 0.0001 x 100,000
Pip value = USD$10,00
Pip Value for Third Currency
Third case is when you have a GBPUSD currency pair, but the deposit currency is EUR. Which is not GBP or USD.
This case requires that you make more calculations. If you use the GBPUSD calculator then the whole calculation is done by the pip calculator.
But, if you want to do it manually, then you need to use the following process.
First:
- decide in which currency you will calculate the pip value. Will that be GBP or USD
Let’s use GBP. The formula for the pip value will be:
- Number of pips: 1
- Instrument: GBPUSD = 0.8246
- Lot size: 1.00 (100,000 units)
- Deposit currency: GBP
- GBPUSD pip size: 0.0001
Pip value = (Pip / Current market price) x Lot size
Pip value = (0.0001 / 0.8246) x 100,000
Pip value = (1.213e-4) x 100,000
Pip value = 12.13
Second:
Now, you need to use the EUR/USD currency pair so you can extract EUR pip value from it.
Current market price for the EUR/USD = 0.6217. Which gives us EUR = 0.6217 USD.
So, the formula would be:
Pip value (EUR) = Pip value (USD) x (1/ (EUR/USD))
Pip value (EUR) = 10.00 x (1/0.6217)
Pip value (EUR) = 16.08
How Do You Calculate GBPUSD Pip Profits?
With the above calculated you can calculate GBPUSD pip profit.
Let’s say you have an open SELL order on the market with the GBPUSD = 0.8246.
And you want to close the trade at GBPUSD = 0.8226.
The price difference in pips is:
Pips = |Entry price – Exit price|
Pips = |0.8246 – 0.8226|
Pips = 0.20
You can see the difference is 20 pips between open and close price.
Now, the profit for 20 pips is:
Profit = Pip value x Pips
Profit = 10.00 x 20
Profit = $200.00
If you want to use GBP as a deposit currency then the pip value is 12.13:
Profit = Pip value x Pips
Profit = 12.13 x 20
Profit = 242.6
Conclusion
If you are beginner in Forex trading you will need this calculator because the calculation manually is not so easy.
Even the Forex basics is not so easy to understand, but in time you learn everything.
Use this calculator and other calculators to see how much you will make per pip so you can set stop loss and take profit properly.
Disclaimer
Calculation`s made in the trading calculator are for informational purposes only. Whilst every effort is made to ensure the accuracy of this information, you should not rely upon it as being complete or up to date. Furthermore this information may be subject to change at any time.
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