How to calculate profits and losses!
Now that you know how to calculate the point value, Come with us to see how to calculate your
profits or loss.
In our example below, we will buy euro and sell U.S. dollar:
EUR / USD exchange rate was
1.4018/1.4021
Now we will buy the euro currency in the price of 1.4021
The size of the transaction (Lot) $ 100,000
the difference of spread is 3 points on the transaction
(transaction cost)
A few hours later the price moves to 1.4551
Then it was our decision to close the deal to take profits
If the new price is 1.4048/1.4051
As soon as we closed the deal
The difference between the entry price 1.4021 and exit price
1.4051
Equal to 30 points, or $ 0.0030
Because 1.4021 - 1.4051 = 0.0030 $
Because we had our deal size of $ 100,000, each point will
be calculated by $ 10
so, the profit is $
300
It will minus the 3 points (broker Spread fare)
the net profit is $ 270
Easy is not it!!
We remind you the example of the last ...
If you want to buy, for example, one euro against the dollar
in the exchange rate of 1.4480 regardless of "spread" After buying
the pair moved to 1.4481
Here we ask what is your profit!
The answer is only $ 0.0001.
Because 1.4481 - 1.4480 = 0.0001 $ is not it!!
Currency need for patience:
As with any new skill you are trying to learn, you need to
learn patience and especially if you wish to encourage yourself to get a good
result from your course , so you are as a Newcomer trader you must know certain
conditions.
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