Forex Profit Calculator Explained: A Strategic Tool for a Profitable Trading Experience

Want to know the tool that will help you calculate the profit on your forex trade? Simply use the forex profit calculator, which provides thorough details on how your trade has performed over time. But what about using the calculator before initiating the trade? Knowing the forex profit calculator beforehand will help you gain insights and take informed trading decisions in real-time. This article examines the forex profit calculator, its functionality, and additional features. Keep reading for a strategic and profitable trading experience.

Forex Profit Calculator Helps You Craft Precise Trading Plans

Calculate the profit or loss before opening a position so that the trading plan remains perfect. Using the forex profit calculator can help you make subtle changes to your trade size or initiate take profit and stop loss levels to increase your gain or minimize your loss. This will help you gain a practical insight into how forex trading works.

How to Use the Forex Trading Profit Calculator?

Search online for a wide range of forex trading profit calculators. After finding the calculator, you will find these fields-

• Currency Pair - The currencies you trade
• Account Currency - The deposit currency of the trading account
• Trade Size - The trade size in units or lots
• Open Price - Your trades entry price
• Close Price - Your trades exit price
• Direction - Buy or sell (long or short

The profit calculator calculates the difference between exit and entry prices and multiples it by the pip value of your trade. The pip value is calculated based on the currency pair, the lot size, and your base currency.

Overview of Pips

A pip represents the smallest change in forex currency pair price. The market has also seen an evolution over the years as forex brokers brought in fractional pips or Pipettes to offer traders better ask and bid prices while trading. These prices form a smaller fraction of a pip.

A Close Look at Pip Value

The pip value can be better understood with an example. The digits ‘5’ and ‘6’ of the EUR/USD price of 1.2345 represent the pip location and a partial pip, respectively. The price movement by 1 pip would result in 1.23456 + 0.0001= 1.234466. If the price falls to 1.23443, it would lead to a 1.3 pip change ( 1.23456 - 1.23443 = 0.000130.

The same calculation applies with currency pairs where the 2nd decimal represents a pip.

As a forex trader, you would also want the pip value in monetary value to analyze and understand gains or losses in your trading account seamlessly while calculating stop loss and take profit targets. For instance, setting a stop loss of 10 pips could mean a loss of $100 or $1000, based on your trading lot size.

Remember that the pip value will always be different for different currency pairs, based on the quote currency.

For instance, the pip value for EUR/USD will appear in USD. Whereas the pip value of EUR/GBP will be shown in GBP.

How to Use the Forex Pip Profit Calculator?

Using the forex pip profit calculator requires you to enter the variables in the account currency and trade size fields. After entering these, the calculator will compute the pip value with Standard, Micro and Mini lots with existing market prices.

Summing Up

The forex profit calculator is more than just a tool. It is your trading companion that stays with you through market fluctuations. By calculating potential profits or losses before entering a trade, you can plan strategies aligned with your risk appetite and trading goals. Understanding pips and pip values further enhances your ability to set realistic stop loss and take profit levels.

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