Three numbers decide what a trade can make, lose and tie up: the pip, the lot and the margin. A move of 20 pips on EUR/USD is worth $2 on a micro lot and $200 on a standard lot, and the margin it takes depends on leverage. This guide works through each one with the arithmetic shown, using the conditions of the Enso Markets ECN account on MetaTrader 5: spreads from 0.0 pips, leverage up to 1:500 and a $50 minimum deposit.
What a pip is
A pip is the standard unit of price movement in forex. For most pairs it is the fourth decimal place (0.0001). For pairs quoted in Japanese yen it is the second decimal place (0.01). MetaTrader 5 shows one more digit, called a fractional pip or point, so EUR/USD at 1.10253 has moved 0.3 pips past 1.1025.
| Pair | Example quote | One pip |
|---|---|---|
| EUR/USD | 1.10250 | 0.0001 |
| GBP/USD | 1.30500 | 0.0001 |
| USD/JPY | 150.000 | 0.01 |
What a lot is
A lot is the trade size. One standard lot in forex is 100,000 units of the base currency, and on forex MetaTrader 5 typically allows sizes down to 0.01 lot.
| Size | Lots | Units of base currency | Pip value on EUR/USD |
|---|---|---|---|
| Standard | 1.00 | 100,000 | $10.00 |
| Mini | 0.10 | 10,000 | $1.00 |
| Micro | 0.01 | 1,000 | $0.10 |
For CFDs on indices, commodities, stocks and crypto the contract size differs by instrument. Right-click the symbol in Market Watch and open Specification to see the contract size, tick size and tick value before you trade.
Working out pip value
Pip value = pip size × units traded, converted into your account currency. When USD is the quote currency (EUR/USD, GBP/USD) the result is already in dollars: 0.0001 × 100,000 = $10 per standard lot. When USD is the base currency, divide by the rate. On USD/JPY at 150.00, one standard lot gives 0.01 × 100,000 = 1,000 yen per pip, which is 1,000 ÷ 150 = $6.67.
Margin and leverage
Margin is the part of your balance set aside to hold a position. Required margin = notional value ÷ leverage. One standard lot of EUR/USD at 1.1000 has a notional value of $110,000.
| Trade | Notional value | Margin at 1:100 | Margin at 1:500 |
|---|---|---|---|
| 1.00 lot EUR/USD at 1.1000 | $110,000 | $1,100 | $220 |
| 0.10 lot EUR/USD at 1.1000 | $11,000 | $110 | $22 |
| 0.01 lot EUR/USD at 1.1000 | $1,100 | $11 | $2.20 |
Higher leverage lowers the margin a trade ties up. It does not change the pip value, so the profit or loss per pip on 1.00 lot stays $10 whatever the leverage.
Margin level, margin call and stop out
MT5 shows margin level in the Trade tab: equity ÷ used margin × 100%. With $1,000 of equity and $220 of used margin the level is about 455%. As losses reduce equity the level falls. At the margin call level the platform warns you, and at the stop out level positions are closed automatically, starting with the largest loss. Know both levels before you trade; current trading conditions are on the Account types page.
Putting it together: a worked example
| Step | Calculation | Result |
|---|---|---|
| Account equity | Deposit | $500 |
| Risk per trade | 1% of equity | $5 |
| Stop loss distance | Chart level | 25 pips |
| Pip value needed | $5 ÷ 25 pips | $0.20 per pip |
| Position size | $0.20 ÷ $10 per lot | 0.02 lot |
| Margin at 1:500 | $2,200 notional ÷ 500 | $4.40 |
Sizing from the stop loss and the amount at risk, then checking margin, keeps the loss on any one trade to a number decided in advance.
The same arithmetic for prop firms, IBs and institutions
Enso Markets’ main business is B2B: brokerage infrastructure for proprietary trading firms, introducing brokers and institutional partners, covering MetaTrader 5 hosting, liquidity access, account administration, FIX API and white-label set-ups. Prop firms set contract sizes, leverage and drawdown rules for evaluation and funded accounts on hosted MT5 servers, so their traders see consistent pip values and margin across every phase. Configurations are agreed individually; start on the partnership page or write to marketing@ensomarket.com.
Frequently asked questions
How much is one pip worth on EUR/USD?
$10 on 1.00 lot, $1 on 0.10 lot and $0.10 on 0.01 lot.
What is a micro lot?
0.01 lot, or 1,000 units of the base currency. On EUR/USD each pip is worth $0.10.
Does higher leverage mean bigger profits?
Leverage lowers the margin a position needs. Profit and loss per pip depend on lot size, so a larger position made possible by leverage also carries larger losses.
Where can I see the contract size of gold or an index?
In MetaTrader 5, right-click the symbol in Market Watch and choose Specification.
Figures as of 16 October 2026. Leveraged trading involves risk and may not be suitable for all investors.