How pip value is calculated for EUR/GBP
EUR/GBP is a cross: neither currency is the US dollar. One pip on a standard lot is worth 0.0001 × 100,000 = 10 GBP, converted to US dollars by multiplying by the GBP/USD rate. At GBP/USD 1.2700 that is $12.70. The pip value moves with GBP/USD, not with the EUR/GBP price.
Worked example
An account of $10,000.00 risks 1% on a EUR/GBP trade with a stop loss 30 pips from entry. Assumes GBP/USD at 1.2700, an example rate.
- 1. Risk amount: $10,000.00 × (1% ÷ 100) = $100.00
- 2. Pip value per standard lot: 0.0001 × 100,000 × 1.2700 = $12.70
- 3. Position size: $100.00 ÷ (30 pips × $12.70) = 0.26 lots
Most brokers accept lots in steps of 0.01, so round down to 0.26 lots. If the stop loss is hit, the loss is about $99.06, before spread, commission and any slippage.
These are the calculator's default inputs above, so its result matches.