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

How to Calculate Forex Profit and Loss in a Mini Account

To calculate the forex profit or loss for a Mini account one will have to count the amount of pips that a forex pair has moved and then multiply the number of pips with $1. $1 is the pip size value when trading forex Mini lots.

1 pip is the minimum/smallest currency pair movement which is used by the traders when trading currencies.

1 pip move when trading Mini lots is equal to $1 dollars (10,000 currency units * 0.0001 = $1 dollars)

For Example if EURUSD moves from 1.2000 to 1.2001 this is equivalent to a pip - one pip is the fourth decimal point in the currency quote.

The profit or loss will be:

1.2001 - 1.2000 = 1 pip

1 pip* $1 per 1 pip = $1

Hence, 1 pip move for Mini lot is equivalent to $1 dollars

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

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

The profit or loss will be:

1.2050 - 1.2000 = 50 pips

50 pip* $1 per 1 pip = $50

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

If the trade transaction moves in the direction of the FX trade, the trader will make a profit of $50 dollars. If the FX trade moves against the direction of the trade transaction, the FX trader will make a loss of $50.

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

The profit or loss will be:

1.2100 - 1.2000 = 100 pips

100 pip* $1 per 1 pip = $100

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

If the trade transaction moves in the direction of the FX trade, the trader will make a profit of $100 dollars. If the FX trade moves against the direction of the trade transaction, the FX trader will make a loss of $100 dollars.

How to calculate trading profits & losses of currency trades for a Mini account.

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

How to Calculate Forex Profit and Loss in a Mini Account