How much do you gain or lose per pip?

Ok, I see your margin requirement will be more based on your leverage. So how do you determine how much you lose or gain per pip ? Will it be the same say $1 a pip 100 a pip ? What determines your gain per pip ?

Gain/Loss per pip is dependent on the Lot Size of your trade position as well as currency exchange rate when the position is closed and the money is returned back to your native currency.

I suggest checking out the Pip Value Calculator by BabyPips for assistance.

However, if you are interested in figuring out how the calculation works, here is an example:

Currency Pair: EUR/USD
Pip value per Standard Lot (1.00) = USD 10.00
Pip value per Mini Lot (0.10) = USD 1.00
Pip value per Micro Lot (0.01) = USD 0.10

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Say you have a standard lot though . How can leverage still be dangerous when regardless what happens ea pip is only $10 ?

Leverage is different from Position Sizing.

The Pip Value is how much you will earn / lose when you close your trade position.

Leverage determines the margin requirement to maintain a trade position.

Here is an example:

  • Your Broker offers 1:100 Leverage.
  • To buy 1 Standard Lot of EUR/USD, you will need: USD 100,000 / 100 = USD 1,000
  • Margin requirement of USD 1,000 to maintain the trade position.

However, if you do not have a Stop Loss Order in place, the price can keep running to the point of bankrupting your entire trading account.

Sorry, last question . Ok yes you have a 1,000 to start with , say your trades go negative. Would your trades then close because you only had 1,000 to start with and that 1,000 was the minimum ?

USD 1,000 is the bare minimum to maintain the trade position but certain brokers require 50% margin available which means an account balance of USD 1,500.

Should your margin balance fall below the broker’s acceptable threshold, they can close your trade position prematurely.

Open a demo account, pull up EURUSD, submit a market order and watch your P/L.

It’s not been much time since I have started trading. If I look on the charts, my pips that I gain or lose are not on any constant phase. If you are facing trouble calculating the pips, then calculating it on pip value calculator would be an effective measure.