How do I calculate profits and losses? | Forexgen

When you close out a trade, you can calculate your profits and losses using the following formula:

Price (exchange rate) when selling the base currency - price when buying the base currency X transaction size = profit or loss Assume you buy Euros (EUR/USD) at 1.2178 and sell Euros at 1.2188.

If the transaction size is 100,000 Euros, you will have a $100 profit.

($1.2188 - $1.2178) X 100,000 = $.001 X 100,000 = $100

Similarly, if you sell Euros (EUR/USD) at 1.2170 and buy Euros at 1.2180, you will have a $100 loss.

($1.2170 - $1.2180) X 100,000 = - $.001 X 100,000 = - $100

If the quote currency is not in US dollars, you will have to con- vert the profit or loss to US dollars at the dealer's rate.

Further, if the dealer charges commissions or other fees.