Profit/Loss Calculation
UNDERSTANDING PROFIT AND LOSS IN FOREX TRADING
Learning how to calculate both profit and loss isn’t as hard as you may think, see below for clearly defined details.
Calculation
When the time comes to calculate either profit or loss in relation to your forex trading, You may have read that calculating profit and loss within forex trading is difficult, but remember that in reality it is relatively simple.
Deduct the price of the base currency at time of sale away from the price that was originally paid.
Take the difference between the two figures and multiply it by the size of the transaction to get the required figure.
Remember the equation, base currency sale price – base currency buying price x transaction size = profit or loss obtained.
Learning how to calculate both profit and loss isn’t as hard as you may think, see below for clearly defined details.
Calculation
When the time comes to calculate either profit or loss in relation to your forex trading, You may have read that calculating profit and loss within forex trading is difficult, but remember that in reality it is relatively simple.
Deduct the price of the base currency at time of sale away from the price that was originally paid.
Take the difference between the two figures and multiply it by the size of the transaction to get the required figure.
Remember the equation, base currency sale price – base currency buying price x transaction size = profit or loss obtained.
Examples:
Tom bought Euros at $1.1821 and sold them at $1.1831, at a transaction size of 100,000; his equation was $1.1831 – $1.1821 x 100,000. The sum of this is $100 profit.
Lina sold US dollars at $1.5367 after buying them at $1.5377, at a transaction size of 100,000, the equation is similar to the one mentioned above, yet would result in a loss of $100 instead of a profit
Tom bought Euros at $1.1821 and sold them at $1.1831, at a transaction size of 100,000; his equation was $1.1831 – $1.1821 x 100,000. The sum of this is $100 profit.
Lina sold US dollars at $1.5367 after buying them at $1.5377, at a transaction size of 100,000, the equation is similar to the one mentioned above, yet would result in a loss of $100 instead of a profit