The calculations in forex trading are actually quite simple and easy to understand. For ease of reference, you can use the following cheat sheet to make all your calculations. In fact, in today’s currency trading platforms, most of them would have a clean and concise calculations table to show you all your trades as well as the profits/losses. But most traders love to have an idea of how much profits/losses they would be making to plan their transactions, and entry/exit prices.
Price Change/Difference = Exit Price – Entry Price
Leverage = 100 / Margin Percent (%)
Margin Percent = 100 / Leverage
Profit in Pips = Price Change/Difference X Pip Factor
If the Quote Currency is USD as in EUR/USD, then
Profits in USD = Price Change X Units Traded
If the Base Currency is USD as in USD/CHF, then
Profits in USD = Price Change X Units Traded/Exit Price
For Profits For Non-USD Cross Rates, then this is how you should calculate,
If the Quote Currency is USD, then
Profits in USD = Price Change X Units Traded/Conversion Rate
If the Base Currency is USD, then
Profits in USD = Price Change X Units Traded X Conversion Rate
Using these calculations, you can quite accurately find out how much profits or losses you would be making when holding open forex trading positions.
