Currency Trade Pro

Archive for April, 2010

Calculating Profit / Loss (Gain / Loss)
The movement of units / lowest price in the forex is calculated in units of points / pips. The value of each point will vary according to type of currency pairs.

The total contract size used is in units of lots, namely:
- Standard lot ($ 100,000)
- Mini lot ($ 10,000)
- Micro lot ($ 1,000)

For Direct Rates Pair
Direct rates USD pair is the pair with a suffix ( EUR / USD, GBP / USD, AUD / USD, and NZD / USD), the way of calculation:

Profit / loss = (Selling Price – Purchase Price) x contract size x lot

Example:
Buy four standard lot of EUR / USD 1.2500 and Sell four standard lot of EUR / USD 1.2570
Profit = (1.2570 – 1.2500) x 100 000 x 4
Profit = $ 2,800

Sell one standard lot GBP / USD 2.0010, Buy one standard lot GBP / USD 2.0000
Profit = (1.2010 – 1.2000) x 100 000 x 1
Profit = $ 100

There are easy ways to pair the calculation of which end USD:
Gain one point for a standard lot (100,000) is $ 10.
Gain one point for a mini lot (10,000) is $ 1
Gain one point for a micro lot (1000) is $ 0.1

For Indirect Rates Pair
Indirect rates are pairs with USD as the leading pair (EUR / JPY, USD / CHF, and USD / CAD), how to calculate profit / loss are as follows: Profit / loss = (Selling Price and Purchase Price) / Price x contract size Liquidation x lot
Example:

Buy one standard lot of USD / JPY 110.00
Sell one standard lot of USD / JPY 110.05
Profit = (110.05 – 110.00) / 110.05 x 100 000 x 1 = $ 45.43