It is a unit of price movement in the foreign exchange market. In forex trading, the price gets quoted in decimal in most of the cases. Therefore, we calculate pips based on the smallest price movements in decimal points. Calculation of pips varies with the digits variation of the quotation. For example, most of the forex brokers quote EURUSD in 4 decimal points. Like 1.2345. But some forex brokers especially the ECN brokers quote it is in 5 decimal points like 1.23456. In case USDJPY quoting differs as 120.12 to 120.123. This difference changes the calculation of pip value.
Pip value means how much a pip worth in forex trading. If pip value is $10 for a position size of 100,000 or lot standard lot on EURUSD, that means if EURUSD moves 20 pips in your favor. You will earn 20*10 =$200.
Select currency pair which you are about to trade and then enter position size or units of trade. For example, 100,000 equals 1.00 standard lot. Below is a table to understand what is position size: (you can learn more about it from forex school).
Lot Size Value
Position Size in Unit
After you enter position size you need to select your account base currency. Then hit the calculate button to find the pip value of the selected trading currency pair.
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