Forex Profit Calculator
The Forex Profit Calculator
Forex Profit Calculator is the simplest way to calculate profit or loss while trading forex.
Prices in the Forex market can move excessively rapidly, especially during the volatile periods. So, forex trade involves significant risk. Before entering a trade, it is essential for you to know what you stand to gain or lose from it. Forex Profit Calculator by FinanceBrokerage is a simple tool that will help you determine a trade’s outcome.
But it is also useful to know how this calculation is made to understand your profit or loss potential on each trade.
To use the Forex Profit Calculator:
- Select the Currency Pair for the transaction;
- Select the Base Currency (the one that you purchase);
- Enter Selling or Opening Price;
- After that enter Buying or Close Price;
- Enter the transaction volume – trade size (the amount you are selling);
Negative number means that you faced loss, positive means that you have gained with this forex transaction. Forex calculators are basic and essential tools, each forex trader must be familiar with.
How Calculations are Made
The below examples show how to calculate profit and loss on trades when taking a positions.
Suppose you decide to buy Euros at $1.1251 per euro and sell Euros at $ 1.1261 per euro. The transaction size is 100,000 Euros.
The formula of the calculation is the following:
(Price when selling the base currency – Price when buying the base currency) X Transaction size = Profit or Loss.
The same formula is used by the Forex Profit Calculator.
For our example, it would be like this:
($ 1.1261- $1.1251) X 100,000= $100
It comes out that from this transaction you would make a $100 profit.
Let us consider another example. Assume again the trade in EUR/USD when Euro is trading at $ 1.3646 per Euro. Transaction size is 100, 000 Euro.
But now the EUR decreases to $ 1.3616.
By the following formula we discussed earlier, you should be able to determine that you would see a $300 loss from this transaction:
($ 1.3616.- $1.3646) X 100,000= – $300
We can also determine the unrealized profits and losses on open positions. You just need to substitute the current bid or ask rate for the action you will take when closing out the trade position.
For instance, suppose you bought 100,000 euros at 1.1374 and the current bid rate is 1.1363, you have unrealized loss of $110
($1.1363 – $1.1374) X 100,000= -110$
Also, don’t forget to add dealer commissions or other fees to your losses or subtract from your profits to accurately calculate.
As shown above, the forex profit calculation formula is not complex at all. But still we suggest the use of our calculator to avoid any possible mistakes while determining profit or gain. We hope this tool will prevent you from losing money when trading. Trade wisely, watch if the capital is at risk.
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