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P/L Calculation
How to calculate the value of a pip move
'Pip' means 'price interest point' and is a reference to the smallest incremental price move of a currency.
Point' means a fraction of a Pip
The formula for a Pip = lot size x tick size
Example for 1 lot (or 1000 units) of EUR/USD:
1 pip =1,000 (lot size) x .0001 (tick size) = $0.1 USD
How to calculate Forex Profit and Loss
The formula for calculation of Forex P/L = (Bid Rates - Ask Rates) x lot size = P/L
Example 1
You buy 10 lots (10 x 1000) of EURUSD at 1.3300 and close (sell) this position at 1.3350.
(1.3350 USD - 1.3300 USD) x 10,000 = 50 USD
Example 2
You sell 10 lots (10 x 1000) of EURUSD at 1.3300 and close (buy) this position at 1.3350.
(1.3300 - 1.3350) x 10,000 = -50 USD
If you trade in the GBP or EUR base currency, the conversion of profits will be automatically processed by the system. |
