Forex Trading Profit Calculator
Use this calculator to estimate the potential profit or loss from a forex trade based on your entry and exit prices, lot size, and currency conversion rates.
1 Standard Lot = 100,000 units, 1 Mini Lot = 10,000 units, 1 Micro Lot = 1,000 units
4 (e.g., EUR/USD)
2 (e.g., USD/JPY)
Most pairs use 4 decimal places, JPY pairs use 2.
If your account currency is USD and the quote currency of the pair is USD (e.g., EUR/USD), enter 1.0. If your account currency is USD and the quote currency is EUR (e.g., EUR/GBP, account USD), enter the EUR/USD rate (e.g., 1.08).
Understanding Forex Trading Profit Calculation
Forex trading involves speculating on the price movements of currency pairs. Calculating potential profit or loss is crucial for risk management and trade planning. This calculator helps you estimate the financial outcome of a trade before you even place it.
Key Concepts:
- Entry Price: The price at which you open your trade.
- Exit Price: The price at which you close your trade.
- Trade Direction (Buy/Sell):
- Buy (Long): You profit if the price increases from your entry to your exit.
- Sell (Short): You profit if the price decreases from your entry to your exit.
- Lot Size (Units): The volume of currency you are trading.
- Standard Lot: 100,000 units of the base currency.
- Mini Lot: 10,000 units of the base currency.
- Micro Lot: 1,000 units of the base currency.
- Pip (Percentage in Point): The smallest price increment in a currency pair. For most pairs, a pip is 0.0001. For JPY pairs, a pip is 0.01.
- Pip Value: The monetary value of one pip movement for a specific lot size in your account currency. This is critical because it determines how much money you gain or lose per pip.
- Quote Currency to Account Currency Rate: This is the exchange rate used to convert the pip value (which is initially in the quote currency of the traded pair) into your trading account's currency. If your account currency is the same as the quote currency of the pair you're trading, this rate is 1.0.
How the Calculation Works:
The calculator follows these steps:
- Determine Pip Size: Based on whether the pair has 4 or 2 decimal places for a pip (e.g., 0.0001 or 0.01).
- Calculate Price Difference in Pips:
- For a Buy trade:
(Exit Price - Entry Price) / Pip Size - For a Sell trade:
(Entry Price - Exit Price) / Pip Size
- For a Buy trade:
- Calculate Pip Value per Unit:
Pip Size * Quote Currency to Account Currency Rate - Calculate Total Profit/Loss:
Price Difference in Pips * Pip Value per Unit * Lot Size
Example Scenarios:
Let's consider a few examples with an account currency of USD:
Example 1: EUR/USD Buy Trade
- Entry Price: 1.0850
- Exit Price: 1.0900
- Trade Direction: Buy
- Lot Size: 100,000 units (1 Standard Lot)
- Pip Decimal Places: 4
- Quote Currency to Account Currency Rate: 1.0 (since EUR/USD's quote currency is USD, and account is USD)
- Calculation:
- Pip Size: 0.0001
- Price Difference in Pips: (1.0900 – 1.0850) / 0.0001 = 50 pips
- Pip Value per Unit: 0.0001 * 1.0 = 0.0001 USD
- Total Profit: 50 pips * 0.0001 USD/unit * 100,000 units = $500.00
Example 2: USD/JPY Sell Trade
- Entry Price: 149.50
- Exit Price: 149.00
- Trade Direction: Sell
- Lot Size: 50,000 units (0.5 Standard Lot)
- Pip Decimal Places: 2
- Quote Currency to Account Currency Rate: 0.0067 (assuming JPY/USD rate is 0.0067, or USD/JPY is 149.25, so 1/149.25 ≈ 0.0067)
- Calculation:
- Pip Size: 0.01
- Price Difference in Pips: (149.50 – 149.00) / 0.01 = 50 pips
- Pip Value per Unit: 0.01 * 0.0067 = 0.000067 USD
- Total Profit: 50 pips * 0.000067 USD/unit * 50,000 units = $167.50
Example 3: GBP/AUD Buy Trade (Account in USD)
- Entry Price: 1.9200
- Exit Price: 1.9150
- Trade Direction: Buy
- Lot Size: 10,000 units (1 Mini Lot)
- Pip Decimal Places: 4
- Quote Currency to Account Currency Rate: 0.65 (assuming AUD/USD rate is 0.65)
- Calculation:
- Pip Size: 0.0001
- Price Difference in Pips: (1.9150 – 1.9200) / 0.0001 = -50 pips (Loss)
- Pip Value per Unit: 0.0001 * 0.65 = 0.000065 USD
- Total Loss: -50 pips * 0.000065 USD/unit * 10,000 units = -$32.50
Remember that these calculations do not include other trading costs like spread, commission, or potential slippage, which can impact your actual profit or loss.