Forex Trading Made Easy

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.

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Filed under: Forex Trading, Learn Forex Trading by admin