What is a Forex Profit Calculator?
Introducing the Forex Profit Calculator, a valuable tool for quantitatively simulating the potential monetary and pip gains or losses of a trading position when closed. This calculator operates by simulating the opening and closing of a trading position at specific values, providing a comprehensive display of the resulting profit or loss in both monetary terms and pips.
Here’s a step-by-step guide on how to effectively utilize the Forex Profit Calculator:
Instrument Selection: Traders can choosing from a wide range of options, including major, exotic, and minor currency pairs, globally recognized stock indices, popular cryptocurrencies like ADA, BTC, ETH, DOGE, LTC, and XRP, as well as commodities such as Oil, Gold, and Silver. For the purposes of this example, let’s opt for the AUD/USD currency pair.
Deposit Currency: Select the currency of your trading account deposit to ensure accurate calculations converted to your preferred currency. In this case, we will choose AUD as our deposit currency.
Buy or Sell: Indicate the trade direction by specifying whether it’s a long or short position. For this particular example, we will simulate a long trade and select the buy direction.
Lots (Trade Size): In the forex market, a standard lot represents 100,000 currency units. However, when dealing with non-forex pairs, the number of units per lot may vary. This field allows you to switch between lots and units for precise calculations. For our illustration, let’s choose a trade size of 0.10 lot.
Open Price: Enter the desired open price for the trade. In our case, we will input an open price of 0.75345 for the AUD/USD position.
Close Price: This is the final field of the calculator where you input the closing price for the trade. In our example, we will enter a close price of 0.75855.
Click the Calculate button to initiate the computation.
The Results: The Profit Calculator will swiftly generate the profit in monetary terms (converted to the previously selected account base currency) and the total number of pips gained.
Hence, for our given example, initiating a long trade on the AUD/USD pair with a trade size of 0.10 lots at an open price of 0.75345 and closing it at 0.75855 would result in a profit of AUD 67.66 (profit in money) along with a remarkable gain of 51 pips (profit in pips).
Remember, it’s always beneficial to leverage this valuable tool to gain insights and make informed trading decisions.
This profit calculator may also be used to determine the amount of equity and pip losses that will occur if a trader enters a close price that is lower than the open price (on a buy entry), imitating a stop-loss hit. Or, in the case of a (sell entry), a close price greater than the open price. The results of utilising the Profit Calculator to simulate a stop-loss hit will be shown in the negative.