How Do I Calculate Profit and Loss in a Cent Account Explained

How to Calculate Profit and Loss in a Cent Trading Account

To calculate the profit or loss for a Cent account a trader will count the number of pips that a currency pair has moved and multiply the number of pips with $0.01 or 1 Cent. $0.01 or 1 Cent is the pip size when trading Cent lots.

1 pip is the smallest forex pair movement used when trading currencies.

1 pip movement when trading Cent lots is equivalent to $0.01 or 1 Cent dollars (100 Units of currency * 0.0001 = $0.01 or 1 Cent )

For Example if EURUSD moves from 1.2000 to 1.2001 this is equal to 1 pip - 1 pip is the fourth decimal point in the forex quote.

The profit or loss will be:

1.2001 - 1.2000 = 1 pip

1 pip* $0.01 or 1 Cent per pip = $0.01 or 1 Cent

Hence, 1 pip move for Cent lot is equivalent to $0.01 or 1 Cent dollars

If the trade moves in direction of the trade, the trader will earn a profit of $0.01 or 1 Cent. If the trade moves against the direction of the trade, the trader will make a loss of $0.01 or 1 Cent.

Example 2: for Example if EURUSD moves from 1.2000 to 1.2050 this is equal to 50 pips - 1 pip is the fourth decimal point in the forex quote.

The profit or loss will be:

1.2050 - 1.2000 = 50 pips

50 pip* $0.01 or 1 Cent per pip = $0.5

Hence, 50 pips move for Cent lot is equivalent to $0.5 dollars

If the trade moves in direction of the trade, the trader will make a profit of $0.5 dollars. If the trade moves against the direction of the trade, the trader will accrue a loss of $0.5 dollars.

Example 3: for Example if EURUSD moves from 1.2000 to 1.2100 this is equal to 100 pips - 1 pip is the 4th decimal place in the fx quote.

The profit or loss will be:

1.2100 - 1.2000 = 100 pips

100 pip* $0.01 or 1 Cent per pip = $1

Therefore, 100 pips move for Cent lot is equal to $1 dollars

If the trade moves in direction of the trade, the trader will make a profit of $1 dollars. If the trade moves against the direction of the trade, the trader will make a loss of $1 dollars.

How to calculate profits and losses of currency trades for a Cent account.

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How Do I Calculate Profit and Loss in a Cent Account Explained

How to Calculate Profit and Loss in a Cent Trading Account