How to Calculate Forex Profit and Loss in a Micro Account Explained

How to Calculate Forex Profit and Loss in a Micro Account

To calculate the forex profit or loss for a Micro forex account a trader will count the number of pips that a currency pair has moved and multiply the number of pips with $0.1. $0.1 is the pip value when trading forex micro lots.

1 pip is the smallest currency pair movement used when trading forex currencies.1 pip movement when trading Micro lots is equal to $0.1 dollars (1,000 units of currency * 0.0001 = $0.1 )

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

The profit or loss will be:

1.2001 - 1.2000 = 1 pip

1 pip* $0.1 per pip = $0.1

Therefore, 1 pip move for micro lot is equal to $0.1 dollars

If the trade moves in the direction of the trade, the trader will make a profit of $0.1 dollars. If the trade moves against the direction of the trade, the trader will make a loss of $0.1 dollars.

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 place in the currency quote.

The profit or loss will be:

1.2050 - 1.2000 = 50 pips

50 pip* $0.1 per pip = $5

Therefore, 50 pips move for micro lot is equal to $5 dollars

If the trade moves in the direction of the trade, the trader will make a profit of $5 dollars. If the trade moves against the direction of the trade, the trader will make a loss of $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 fourth decimal place in the currency quote.

The profit or loss will be:

1.2100 - 1.2000 = 100 pips

100 pip* $0.1 per pip = $10

Therefore, 100 pips move for micro lot is equal to $10 dollars

If the trade moves in the direction of the trade, the trader will make a profit of $10 dollars. If the trade moves against the direction of the trade, the trader will make a loss of $10 dollars.

How to calculate profits and losses of currency trades for a micro forex trading account