Beginners Guide: How to calculate Profit & Loss of FX tradings

May 13, 2017

Learn how to calculate Profit and Loss today!

Beginners Guide: How to calculate Profit & Loss of FX tradings

If you have no idea how much profit you are looking to make on your trades, your investment plan probably won’t go well.

You should at least know how much Risk you are bearing.

Being able to calculate expected profit/loss on your each trade is very important.

How to calculate Profit and Loss

Simple formula for calculating profit and loss are as below.

In case of a Buy(long) positions

(Position Closing Price – Position Opening Price) * Trading Volume

In case of a Sell(short) positions

(Position Opening Price – Position Closing Price) * Trading Volume

— Example —

Profit calculation  (105 JPY – 100 JPY) * $10,000 = 50,000 JPY Profit
Loss Calculation  (100 JPY – 105 JPY) * $10,000 = 50,000 JPY Loss

You can also easily assume the approximate Profit and Loss by calculating “Pip Value”.

To learn how to calculate “Pip Value”, please visit the page here.

Calculating Take Profit and Stop Loss levels

If you are setting up pending orders such as “Take Profit” or “Stop Loss”, then the following example may help your calculation.

The main formula of calculating Profit and Loss is as below.

SL / TP Levels = SL, TP Amount / Pip Value Formula * Exchange Rate

— Example —

Account Base Currency: EUR
Currency Pair: EUR/USD
Take Profit Amount: 200.00 EUR
Stop Loss Amount: 200.00 EUR
Pip Value Formula: 90.78933
Current Exchange Rate: 1.14320 (EUR/USD)

⇩ ⇩ ⇩ ⇩ ⇩

SL / TP Levels = 200.00 / 90.78933 * 1.14320
SL / TP Levels = 2.51 pip

Are you bothered to calculate by yourself? Use XM’s Forex Calculator and get instant results online!

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