How to Calculate the Pip Value in FXCM Forex?

Calculating Pip Value for Direct Currency Pairs in FXCM

In FXCM forex trading, the pip value of direct currency pairs remains constant regardless of exchange rate fluctuations. For example, in a standard lot (100,000 units) of EUR/USD, each pip is always worth $10, no matter how the exchange rate moves.

The formula to calculate pip value for direct currency pairs is:
(Minimum Price Increment / Exchange Rate) × Contract Size × Lot Size = Pip Value

It is important to note that direct currency pairs on the FXCM platform have a fixed pip value characteristic, meaning the pip value does not change with exchange rate movements. In other words, for a standard 100,000-unit forex trade, the pip value for all direct currency pairs is $10.

Calculating Pip Value for Indirect Currency Pairs in FXCM

In FXCM forex trading, the pip value of indirect currency pairs fluctuates with exchange rate changes. The calculation method is similar to direct currency pairs, except the contract size is based in USD.

The formula to calculate pip value for indirect currency pairs is:
(Minimum Price Increment / Exchange Rate) × Contract Size × Lot Size = Pip Value in USD

The Japanese Yen (JPY) is an indirect currency, meaning its pip value changes with exchange rate movements.