What Is a Pip? Pip Value in Forex and Gold (XAUUSD)
By Fernando Funicelli · Founder of Lucky Dogs Trading Systems
A pip is the standard unit of price movement in forex: on currencies quoted to 4 decimal places, 1 pip is the 4th decimal (0.0001). On 1 lot of EUR/USD, each pip is worth 10 USD; on 0.01 lot, 0.10 USD.
Someone writes in the group: "50 pips of profit today". Sounds like a lot. And it raises the question every beginner has asked: what is 1 pip worth in money? Did those 50 pips pay for lunch or for the month?
It depends, and that's where the confusion lives. Pips alone don't tell you how much money came in: the same 50 pips can be 5 USD or 500 USD. Gold is worse, because every broker, every platform and every group counts the pip its own way.
The math that ends the doubt fits in one sentence: a pip on its own is worth nothing. What's worth money is the pip times the lot.
Below you'll see what a pip is, the difference between a pip and a point in MetaTrader 5, what 1 pip is worth on 0.01, 0.10 and 1 lot, how to calculate it on any pair and how to count gold (XAUUSD) moves without falling into the pip confusion.
What is a pip in forex
In forex, a pair's price tells you how much 1 unit of the left-hand currency is worth in the right-hand currency. EUR/USD at 1.0850 means 1 euro is worth 1.0850 dollars.
The pip is the standard step of that price. On most pairs, it's the 4th decimal place: if EUR/USD goes from 1.0850 to 1.0851, it moved 1 pip. From 1.0850 to 1.0900, it moved 50 pips.
Pip and pipette: the 4th and 5th decimals
Most brokers now show one more decimal: 1.08513. That 5th decimal is the pipette, a tenth of a pip. It lets price move in smaller steps, but market talk is still in pips: "the spread is at 1.2 pips", "the stop sits 20 pips away".
On yen pairs: the 2nd decimal
Because 1 dollar buys a lot of yen, pairs with the Japanese yen are quoted with fewer decimals. On USD/JPY, 1 pip is the 2nd decimal, 0.01: from 150.25 to 150.26, the pair moved 1 pip. The 3rd decimal, when it shows, is the pipette.
Pip vs. point in MT5: the difference
MetaTrader 5 doesn't talk in pips. It counts in points, and the point is always the last decimal of the quote. On 5-decimal pairs, the point is the pipette: 10 points = 1 pip.
That's why the EUR/USD spread shows in MT5 as 12, not 1.2. That's 12 points, or 1.2 pips. The same goes for the stop and target you type in points into an EA, MetaTrader's trading robot.
| Pair | Decimals in MT5 | 1 pip | 1 point | 1 pip in points |
|---|---|---|---|---|
| EUR/USD | 5 | 0.0001 | 0.00001 | 10 |
| USD/JPY | 3 | 0.01 | 0.001 | 10 |
Read "pips" in the group and "points" in MT5? On these pairs, divide the points by 10 to get the pips.
Pip value: what 1 pip is worth on 0.01, 0.10 and 1 lot
Now the answer for the group. The lot is the trade size: at most brokers, 1 lot of currencies is 100,000 units of the left-hand currency. On pairs with the dollar second, like EUR/USD and GBP/USD, the pip value comes out straight in dollars:
| Lot | Units | Value of 1 pip (pairs with the dollar second, like EUR/USD) |
|---|---|---|
| 0.01 | 1,000 | 0.10 USD |
| 0.10 | 10,000 | 1 USD |
| 1.00 | 100,000 | 10 USD |
So the group's 50 pips are 5 USD on 0.01 lot, 50 USD on 0.10 lot and 500 USD on 1 lot. The number of pips was the same. The money changed a hundredfold.
Anyone who counts pips without saying the lot is telling half the story.
How to calculate pip value
The table covers the most common case. For any pair, the math has three steps:
- Find the pip size: 0.0001 on most pairs; 0.01 on yen pairs.
- Multiply by the contract size and the number of lots. On currencies, the contract is 100,000 units per lot at most brokers.
- Read the result in the pair's right-hand currency. If it isn't your account currency, convert it at the current price.
Example 1, EUR/USD on 0.10 lot: 0.0001 × 100,000 × 0.10 = 1 USD per pip. The right-hand currency is the dollar, so there's nothing to convert.
Example 2, USD/JPY on 1 lot: 0.01 × 100,000 × 1 = 1,000 yen per pip. With the dollar at 150 yen (an example price), that's about 6.67 USD per pip.
Notice the difference. On pairs with the dollar on the right, the pip stays fixed at 10 USD per lot on a dollar account. On the others, it starts out in the right-hand currency and shifts a little with the price.
Pip in gold (XAUUSD): what it's worth and how to count it
Gold is where the word pip confuses people the most. And it's where most people want to know what 1 pip is worth on XAUUSD, gold priced in dollars per ounce.
Gold with 2 or 3 decimals: the 0.01 USD and 0.001 USD tick
At most brokers, gold comes with 2 decimal places. The smallest price step, the tick, is 0.01 USD. At some, it comes with 3 decimals, and the tick is 0.001 USD.
That changes the MT5 point. With 2 decimals, 1 point is a 0.01 USD move; with 3, it's 0.001 USD. The same "100 points" are worth a 1 USD move at one broker and 0.10 USD at another.
Why everyone counts the gold pip differently
On currencies, the pip is standard. On gold, it isn't. The most common convention is 1 pip = a 0.10 USD move, but some brokers and platforms use 0.01 USD.
That's why "100 pips on gold" can mean gold moved 10 USD or just 1 USD. A tenfold difference in the same sentence.
The way out is simple: on gold, talk in dollars moved. "Gold moved 5 USD" means the same thing at any broker, platform or group.
What a gold move is worth on 0.01, 0.10 and 1 lot
At most brokers, 1 lot of gold is 100 ounces. The whole table comes from that:
| Lot | Ounces (100-ounce contract) | Gold moves 1 USD | 1 pip (0.10 USD) | 1 point with 2 decimals (0.01 USD) |
|---|---|---|---|---|
| 0.01 | 1 | 1 USD | 0.10 USD | 0.01 USD |
| 0.10 | 10 | 10 USD | 1 USD | 0.10 USD |
| 1.00 | 100 | 100 USD | 10 USD | 1 USD |
The line to remember: 1 lot = 100 ounces, so every 1 USD gold moves is worth 1 USD on 0.01 lot. On 0.10 lot, 10 USD. On 1 lot, 100 USD. It's the same math as what 1 lot of gold is worth, in our XAUUSD guide.
Where to see the decimals and the contract in MT5
All the math starts from two numbers at your broker: how many decimals the price has and the contract size. Both are two clicks away:
- Open Market Watch with Ctrl+M.
- Right-click the symbol and choose Specification.
- Check the fields:
- Digits: the number of decimals in the price. 2 or 3 on gold, 5 on most currencies and 3 on yen pairs;
- Contract size: 100 on gold and 100,000 on currencies, at most brokers;
- Minimal volume and Volume step: the smallest lot you can open and the increment from one lot to the next.
Check at your broker before you do the math. If the contract is different, the tables change in the same proportion. The path to each window is in the official Market Watch help.
What changes pip value (and what doesn't)
Three things change what each pip is worth:
- The lot. Double the lot, double the value of each pip.
- The broker's contract. The tables assume 100 ounces and 100,000 units per lot; a different size changes the value with it.
- The price, on pairs without the dollar on the right. As on USD/JPY, where the pip starts out in yen and has to be converted.
One thing doesn't change it: leverage. It only affects the margin, the money the broker sets aside to open the position. At 1:100 or at 1:500, 0.10 lot of gold wins or loses the same 10 USD for every 1 USD move. The full math is in leverage in forex: what 1:500 changes (and what it doesn't).
And how much the account can take before the broker starts closing positions on its own is a different calculation, the one for margin level, free margin and stop out in MT5.
Our EAs and the lot
Doing this math on every trade gets tiring. And getting one decimal wrong means opening a lot ten times bigger than you meant to.
Our algorithms do the math for you. All three EAs trade gold on MetaTrader 5 and size the lot from the balance: every gain increases the lot of the next trade, and the lot only grows when the balance grows. It's compounding, on autopilot, without you counting a single pip.
- Beagle Gold, where you choose the risk per trade, is the most direct for anyone who thinks in money, not in pips. You choose from 1% to 5% of the balance per trade, set before each entry, and it calculates the lot. Every order arrives with the stop already on the server. In the test with real ticks, it made +184% in 2025 on the Moderate profile, with 21 of 22 months in profit in 2025 and 2026.
- Collie Gold works with gold on 2 or 3 decimals and under any name (XAUUSD, GOLD...). The difference in decimals that confuses anyone counting points is handled on its side.
- Pitbull Gold enters every trade with the target and the stop already on the broker's server, and runs from 100 USD.
All three have a free demo: you run 2025 and 2026 in the Strategy Tester, with your broker's data, and see the lot of every trade. To see each one's results, compare the three side by side.
Frequently asked questions
What is 1 pip worth on XAUUSD?
On the most common convention, 1 pip on gold is a 0.10 USD move. So it's worth 0.10 USD on 0.01 lot, 1 USD on 0.10 lot and 10 USD on 1 lot. Some brokers and platforms call a 0.01 USD move a pip, and then each value is 10 times smaller. To avoid mistakes, count in dollars: every 1 USD move is worth 1 USD on 0.01 lot.
What is 1 pip worth on 0.01 lot?
0.10 USD on EUR/USD and the other pairs with the dollar second. On gold, also 0.10 USD, on the 1 pip = 0.10 USD convention.
Are a pip and a point the same thing?
No. The point is the last decimal of the quote, and that's how MT5 counts. On 5-decimal pairs, 1 pip = 10 points: a 12-point spread on EUR/USD is 1.2 pips.
How many pips is 1 dollar on gold?
10 pips, on the 1 pip = 0.10 USD convention. On the 0.01 USD convention, it's 100. In MT5 points, a 1 USD move is 100 points at a 2-decimal broker and 1,000 at a 3-decimal one.
Does leverage change pip value?
No. Leverage only changes the margin the broker sets aside to open the position. The same lot wins and loses the same at 1:100 or at 1:500. See what leverage changes (and what it doesn't).
Where do I see how many decimals gold has at my broker?
In Market Watch (Ctrl+M): right-click gold and choose Specification. The Digits field shows 2 or 3. The Contract size is in the same window.
Pip times lot: that's the math that decides what each move is worth, in forex and in gold. If you'd rather not do it on every trade, our EAs size the lot from the balance and let compounding work on its own. See the three gold robots side by side, download the free demo and run 2025 and 2026 in your MetaTrader. If you want to set each trade's risk as a percentage, start with Beagle Gold.
