Pips, Lots and Pip Value
Every Expert Advisor (EA) trades in lots, and most sellers describe their stops and targets in pips or points. Before you can check whether an EA's settings fit your own risk, you need to know what those three words mean, and how to turn them into money. This page covers exactly that, the way MetaTrader 5 (MT5) uses them.
Price, Digits and Points
A price in MT5 is quoted to a fixed number of decimal places. MT5 calls this the symbol's digits, and you can see it in the symbol's Specification window (Market Watch, right-click the symbol, Specification).
A point is one unit in the last decimal place of that price:
| Quoted to | Example price (Illustrative) | One point |
|---|---|---|
| 5 digits | 1.08500 | 0.00001 |
| 3 digits | 150.123 | 0.001 |
| 2 digits | 2045.67 | 0.01 |
MT5 measures several things in points: the spread, and the stops level (the minimum distance a stop must keep from the price).
Tick size is different. It's the smallest step the price can actually move, and the Specification window shows it. For most currency pairs it equals one point. For some symbols it doesn't: a symbol quoted to two decimals might only move in steps of 0.25. When the two differ, the calculation below uses the tick size, never the point.
Pips
A pip is not an MT5 setting. It's a trader's convention, and it means different things on different symbols.
- On a currency pair quoted to 5 digits, one pip is 0.0001, which is 10 points.
- On a pair quoted to 3 digits (yen pairs, for example), one pip is 0.01, also 10 points.
- On a pair quoted to 4 or 2 digits, one pip is one point.
- On gold, silver, indices and crypto there is no standard pip. Sellers and brokers use the word for different distances.
So when a seller gives a stop "in pips", check what the symbol's digits are, and on anything that isn't a currency pair, ask the seller what price distance they mean. If you can't find out, the stop distance is unknown, and you can't size a trade from it.
Turning a Stop Into a Price Distance
Take a buy on a pair quoted to 5 digits, with a 25-pip stop (Illustrative):
- 25 pips × 10 points per pip = 250 points
- 250 points × 0.00001 = a price distance of 0.00250
- Entry 1.08500, stop 1.08500 − 0.00250 = 1.08250
That price distance is what MT5 works with. To count it in ticks, divide it by the tick size: 0.00250 ÷ 0.00001 = 250 ticks.
Lots and Contract Size
A lot is MT5's unit of trade size. How much of the underlying one lot holds is the symbol's contract size, shown in the Specification window. On many brokers' currency pairs, one lot is 100,000 units of the first currency in the pair, so 0.10 lots is 10,000 units and 0.01 lots is 1,000. Other symbols use other contract sizes, so read it rather than assume it.
The broker also sets three limits for each symbol, all in the Specification window:
- Minimal volume: the smallest trade allowed, often 0.01 lots.
- Volume step: the step trade sizes go up in, often 0.01.
- Maximal volume: the largest single trade.
A trade size must be a whole number of steps, between the minimum and the maximum.
Pip Value: What One Pip Is Worth
Pip value is the money one lot gains or loses when the price moves one pip.
On a currency pair, it's the contract size times the pip size, in the pair's second currency:
- EURUSD, one lot of 100,000: 100,000 × 0.0001 = 10 US dollars per pip, which is 1 per point.
- USDJPY, one lot of 100,000: 100,000 × 0.01 = 1,000 yen per pip. In a dollar account that's converted at the current rate: at 150.00, about 6.67 dollars per pip (Illustrative).
That conversion is why pip value can change from day to day when the pair's second currency isn't your account currency.
MT5 does this sum for you as tick value: the money one lot gains or loses when the price moves one tick. Tick value already includes the contract size, so never multiply it by the contract size again. MT5 can hold slightly different values for a gain and for a loss; use the loss value, in your account currency. Read it from the Specification window, and check which currency it's shown in.
From Your Risk to a Lot Size
This is the arithmetic that lets you set risk first and the lot size second (Illustrative, no commission):
- Balance 10,000, and you'll risk 1% on a trade: you may lose 100.
- Stop 25 pips, and one lot moves 10 per pip on this symbol: one lot at the stop loses 250.
- Lot size = 100 ÷ 250 = 0.40 lots.
Two rules keep it honest:
- Both sides in the same unit. Pips with value per pip, or points with value per point. Mixing them is out by a factor of ten.
- Round down, never up. Round the result down to the broker's volume step. If it comes out below the minimal volume, that trade doesn't fit your risk at that balance. Rounding up to the minimum means risking more than you decided to.
A stop limits a loss to roughly its size; it doesn't guarantee it (page 0.4 explains why). For quick sums on currency pairs, the position size calculator does this arithmetic for you.
Why This Matters for an EA
An EA's settings decide its lot size, and its stop decides how far a losing trade runs. Put the two together with the pip value and you know what one losing trade costs, which is the number to check against your own limit.
MT5 details checked against MetaQuotes' MetaTrader 5 help and MQL5 reference, October 2026. Examples are illustrative; read your own broker's figures.
Trading involves risk. Only trade with money you can afford to lose. This page is educational and is not financial advice.
© 2026 The Robotic Trader. All rights reserved.