Forex Profit Calculator

Evaluating Trade Profit and Loss Before Execution

Calculating potential net profit and total pip gain helps traders assess trade setups against account performance goals. Whether holding a long position or shorting a currency pair, this calculator determines exact dollar returns and pip outcomes based on trade volume and price movement.

Profit and Loss Formula Breakdown

PnL is determined by price movement direction and position volume:

Pip Distance (Long) = (Exit Price - Entry Price) × Multiplier

Pip Distance (Short) = (Entry Price - Exit Price) × Multiplier

Net Profit ($) = Pip Distance × (Lot Size × Pip Value per Lot)

• Multiplier: 10,000 for standard 4-decimal forex pairs; 100 for 2-decimal JPY pairs.
• Trade Direction: Long positions profit when exit price is higher than entry; Short positions profit when exit price is lower than entry.

Step-by-Step Worked Example

Suppose you take a Long position on EUR/USD with an entry price of 1.0850, an exit price of 1.0920, and a volume of 0.50 Lots.

1. Calculate Pip Gain: (1.0920 - 1.0850) × 10,000 = +70.0 Pips.
2. Determine Pip Value for 0.50 Lots: 0.50 Lots × $10/pip = $5.00 per pip.
3. Calculate Net Cash Profit: 70.0 pips × $5.00/pip = +$350.00 Profit.

If the trade had been short with the same prices, the trade would result in a -$350.00 loss.

Common Mistakes Traders Make

• Forgetting Overnight Swap Fees: Positions held overnight incur rollover interest (swap fees) which adjust net cash payout.
• Ignoring Spread and Commission Deduction: The difference between bid and ask prices reduces net profit by the spread cost upon entry.
• Miscalculating Short Position Outcomes: On short trades, profit requires exit price to be lower than entry price.

Frequently Asked Questions

How are commissions subtracted from trade profit?
Subtotal trade profit minus your broker's round-turn commission fee (e.g. $7 per lot) yields net realized profit.

What is swap rate?
Swap is the interest rate differential between the two currencies in a pair, credited or debited daily at 5:00 PM EST.

Why does pip calculation differ on Gold?
Gold (XAU/USD) price quotes move in $0.10 points. A $1.00 move in Gold equals 10 points ($10 per standard lot).