Forex Profit And Loss Calculator

Forex P/L Formula:

\[ P/L = (Exit - Entry) \times Lot\ Size \times Pip\ Value \]

Entry Price:

price

Exit Price:

price

Lot Size:

lots

Pip Value:

currency

Profit/Loss (P/L):

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1. What is Forex Profit/Loss Calculation?

The Forex Profit/Loss calculation determines the financial outcome of a currency trade based on the price difference between entry and exit points, adjusted for position size and pip value.

2. How Does the Calculator Work?

The calculator uses the Forex P/L equation:

\[ P/L = (Exit - Entry) \times Lot\ Size \times Pip\ Value \]

Where:

\( Exit \) — Exit price of the trade
\( Entry \) — Entry price of the trade
\( Lot\ Size \) — Size of the position in lots
\( Pip\ Value \) — Value of one pip in your account currency

Explanation: The equation calculates the profit or loss by multiplying the price difference by the position size and the value of each pip movement.

3. Importance of P/L Calculation

Details: Accurate P/L calculation is crucial for risk management, trade evaluation, and determining position sizing in forex trading.

4. Using the Calculator

Tips: Enter all values in the correct units. Entry and exit prices should be in the same currency pair format. Lot size is typically 1.00 for standard lots (100,000 units), 0.10 for mini lots (10,000 units), or 0.01 for micro lots (1,000 units).

5. Frequently Asked Questions (FAQ)

Q1: What is a pip in forex trading?
A: A pip (percentage in point) is the smallest price move that a currency pair can make, typically 0.0001 for most pairs or 0.01 for JPY pairs.

Q2: How do I determine pip value?
A: Pip value depends on your account currency and the currency pair traded. Many brokers provide pip value calculators or display it in their trading platforms.

Q3: What's the difference between standard, mini and micro lots?
A: Standard lot = 100,000 units (1.00), mini lot = 10,000 units (0.10), micro lot = 1,000 units (0.01) of the base currency.

Q4: Why is my P/L negative?
A: A negative P/L means your trade resulted in a loss (exit price was worse than entry price for your position direction).

Q5: Does this calculator account for commissions or swaps?
A: No, this calculates only the price movement component. For complete P/L, you would need to factor in any commissions or overnight financing costs.