Direct answer
To calculate the number of pips in forex, first determine the pip size (the price distance that equals 1 pip for the instrument), then compute the price difference between two quotes, and divide by that pip size.
A common formula is:
pip count = (ending price − starting price) / pip size
Use the absolute value if you only care about move size rather than direction.
Explanation: definitions and inputs
A pip is a standardized unit used to express how much a forex price has moved. The key operational detail is that pip size depends on the quoting convention of the currency pair.
- Identify the pip size
- For many pairs quoted with 4 decimal places, 1 pip is often 0.0001.
- For pairs quoted with 5 decimal places, 1 pip is often 0.00010 (while the smallest visible price step is 0.00001).
- Measure the price move
- Let starting price be the first quote and ending price be the second quote.
- Compute price difference = ending price − starting price.
- Convert the price move to pips
- Divide the price difference by the pip size.
- Example structure: if the price moved 0.0034 and your pip size is 0.0001, then pip count = 0.0034 / 0.0001 = 34 pips.
Example checks: points vs pips
Forex platforms sometimes show points (the smallest quoted increment) alongside pips. A quick way to sanity-check your calculation is to relate points to pips:
- If your platform lists a “point” as 0.00001 and your “pip” as 0.00010, then 1 pip = 10 points.
- In that situation, if the quote changed by 120 points, the move in pips is 120 / 10 = 12 pips.
This kind of check is useful because it reduces the chance of mixing a 4-decimal pip rule with a 5-decimal point display, or vice versa.
Limitations and what to verify
- Pip definitions can vary by instrument and data feed. The formula is consistent, but the pip size you use must match your pair’s quoting convention (for example, whether the feed is effectively 4- or 5-decimal).
- Rounding matters. If your quotes are rounded to a certain number of decimals, pip counts derived from them reflect that rounding.
- Spreads and execution are separate from pip counting. If you compare bid/ask or different execution times, the apparent move may differ; pip calculation only converts the specific two prices you choose into pip units.
- Uncertainty is unavoidable without the exact pip size. If you cannot confirm the pip size (or point-to-pip mapping) for your specific symbol, you cannot uniquely determine pip count from price alone.