The Profit Calculator
Forex Profit Calculator is a simple tool that will help you determine a trade’s outcome/profit.
Before taking a trade, it is very important to know what you stand to gain or lose from it.
Then you can decide whether to continue and take a trade or not.
You can also set different bid and ask prices and compare the results on the forex profit calculator.
What you should look at to calculate the profit /loss on a trade
- Your Trading Account’s currency
- Opening trade price
- Trade direction
- Trade size
- And closing trade price.
How to use a forex profit calculator
- First,Pick the currency pair you wish to trade
- Choose if you are selling or buying
- Set the open and close price
- Select in which currency you would like to see the results
- Type the number of units in the trade (position size).
- Click on the Calculate button.
The profit/loss is shown below this button (a negative value indicates a loss).
- To compare new values, just change them and use the Calculate button again to see the results.
How to Calculate Profit and Loss using a formula
To clearly understand the profit and loss calculation, we shall consider some examples on how to calculate profit or loss with a formula.
The following two examples illustrate how to calculate profit or loss after taking a trade.
1st example on how to calculate profit or loss
It simply means you can buy $1 at 1.2340 CAD or sell $1 at 1.2338 CAD.
When you buy $10,000 each at 1.2340, you will pay (10,000 x 1.2340) = 12340 CAD.
After taking a trade and price rises to 1.2515/1.2517.
Since we are buying USD while selling the CAD, to close trade we must sell the dollar and buy back the CAD.
To calculate your profit,
Selling $10,000 at 1.2515, you will receive (10000 x 1.2515) = 12515 CAD
Net profit = (12515 – 12340)
= 175 CAD
To change your profits into dollars, you simply divide your answer with the current exchange rate (price), USD/CAD at 1.2515.
Profit = 175/1.2515
2nd example on how to calculate profit or loss
Now from the example above, let’s say we decide to sell USD/CAD and trade at the same price 1.2338/1.2340.
To sell $10,000 you pay 12338 CAD (10,000 x 1.2338).
However, if USD strengthens after taking a trade and closes with your stop loss to 1.2515/1.2517.
This means your minimum loss attained after selling $10,000 at 1.2517 and received 12517 CAD.
You sold $10,000 at 1.2338 CAD, receiving 12338 CAD.
When you buy back $10,000 at 1.2517, you pay 12517 CAD.
The difference is (12338 – 12517) = -179 CAD
Total Loss = (179) CAD
To convert it to dollar, you simply multiply by the current rate, USD/CAD rate, 1.2517
= Total loss in dollars = ($143)
Procrastination to trade is when your trading set up confirms and you hesitate to take trade. Or your trade show all failing signals and you hesitate to close trade to cut losses. Also, in cases, where you sometimes hesitate to take profit because you want to...
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