Calculation of the exchange loss of profit are the basic capabilities that must be held by every Forex trader. In forex trading, the movement of the unit or the smallest price calculated in points / pips. The value of each point (pip) vary depending on the currency pair type (pair).
Pip
Pip is a common form of value addition of the currency. Example: EUR / USD moves from 1.2250 to 1.2251, 1 pip. Pip is the added value of every last decimal places. The pip value that we know the outcome.
Keep in mind, because each currency has a value of each, then? need to know how to calculate the content of each value that exists.
For example, the USD / JPY at a price of 119.80 (note the currency consists only of two (2) decimal places, others there are four (4). decimal behind the decimal point in the case of the USD / JPY this, a pip is 0:01 so the calculation is as follows :.
USD / JPY:
119.80
12:01 divided by the price of foreign currency = pip value
12:01 / 119.80 = 0.0000834
that for couples who are 4 decimal places, then one pip is 0.0001 for example, for the pair USD / CHF and USD / CAD, the calculation is:
USD / CHF:
1.5250
0.0001 divided by the price of foreign currency = pip value
0.0001 / 1.5250 = 0.0000655
USD / CAD:
1.480
0.0001 divided by the price of the foreign currency pip value =
0.0001 / 1.480 = 0.00006715
in the case of the other pair, where the US dollar is the currency indirectly, for example the EUR / USD and GBP / USD, the calculation is as follows:
EUR / USD:
1.20
0.0001 divided by the price of the foreign currency pip value =
for
0.0001 / 1.20 EUR = 0.00008196
Furthermore, to obtain US dollars then the calculation is as follows:
EUR x price currency
to
0.00008196 0.00009999 x 1.20 =
highest interpretation 0.0001
GBP / USD:
1.7975
0.0001 divided by the price of the currency foreign = pip value
so 0.0001 / 1.7975 = GBP 0.0000556 to obtain the value of the US dollar then the calculation is as follows:
x GBP currency prices
to
x 1.7975 = 0.0000556 0.0000998
[00001, which is the basis for calculating Pip and the value that will be generated.
batch higher performance
the foreign exchange market traded as much . Standard value per lot is $ 100,000. There is also a mini lot with $ 10,000. currency exchange rates or measured in pips, which is the smallest value in the currency or currencies
Assumptions :. $ 100,000 per lot. Recalculation to know and influence the value of a pip. exchange rate USD / JPY at 119.0
(12:01 / 119.80) x $ 100,000 = $ 8.34 per pip
USD CHF rate of 1.4555 / d ' exchange
(0.0001 / 1.4555) x $ 100,000 = $ 6.87 per pip
another case where the US dollar is the base currency.
EUR / USD exchange rate of 1.1930
(0.0001 / 1.1930) x 100 000 EUR = 8:38 x 1.1930 = $ 9.99734 (10 $ per pip)
GBP / USD exchange rate of 1.8040
(0.0001 / 1.8040) x 100 000 GBP = 5.54 x 1.8040 = 9 99416 ($ 10 per pip).
How do I calculate profit / loss?
In calculating the profit loss forex, you need to know about the indirect terms Rates Pair, Pair Rates Direct and Cross Rates pair.
Once you can calculate Pips and many, then we can calculate profits and losses after trade forex
total size contract is used in lots , namely:
- standard lot ($ 100,000)
- Mini lot ($ 10,000)
- lot Micro ($ 1000)
Example:
Direct par Rates Profit Loss Forex
direct Rates pair is pair with USD as a suffix (GBP / USD, EUR / USD, AUD / USD and NZD / USD), the calculation of profit / loss for the pair of tariffs are:
profit / loss = (sales & ndash; purchase Price) x contract size x lot
Example:
Buy 4 standard lots of EUR / USD 1.2500 and sell 4 standard lots of EUR / USD 1.2570
Profit = (1.2570 & ndash; 1.2500) x 100,000 x 4
Profit = $ 2.800
Sell 1 standard lot of GBP / USD 2.0010, buy 1 standard lot of GBP / USD 2.0000
Profit = ( 1.2010 & ndash; 1.00) x 100 000 x 1100
profit = $
There is no way an easy calculation for a pair that ends USD as below:
earn 1 point for 1 standard lot (100,000) is $ 10.
earn 1 point for 1 mini lot (10,000) is $ 1
gain 1 to 1 micro lot (1000) was $ 0.1
indirect par Rates loss of profit Forex
indirect pair rate is the pair with USD as a prefix (USD / JPY, USD / CHF and USD / CAD) and the calculation of profit / loss for indirect pair rates are as follows:
profit / loss = (sales Price & ndash; purchase Price) / (Price Liquidation x contract size x lot)
Example:
Buy 1 standard lot of USD / JPY 110.00
sell 1 standard lot of USD / JPY 110.05
= Profit (110.05 & ndash; 110,00) / 110.05 x 100,000 x 1 = $ 45.43
Cross par Rates Profit Loss Forex
to exchange Cross Rates pairs that do not include USD (GBP / JPY, EUR / JPY, AUD / JPY, EUR / GBP and GBP / CHF), the method of calculation of profit / loss are:
= profit (sales & ndash; purchase price) x rate currency / (Rate Pair x contract size x lot)
Example:
Buy 1 lot EUR standard / GBP at 0.6760 price
(EUR / USD is the base currency of the EUR / GBP, as the front of the EUR / GBP is the base currency)
Buy 1 lot EUR standard / GBP at the price of 0.6750 rate EUR / USD: 1 1840
Profit = (0.6760 & ndash; 0.6750) x 1.1840 / 0.6750 x 100,000
Profit = $ 175.4
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