How to Trade Using the Forex Profit Calculator
A Forex profit calculator can be a very useful tool to a trader. In this article, we will talk you through how to use the Admirals Forex trading calculator and explain exactly what it shows you!
What Is a Forex Profit Calculator?
A Forex profit calculator, or a trading calculator, allows you to enter the details about a specific trade you are planning to make and will give you, in return, your estimated profit, or loss, and costs associated with the trade.
The Admirals’ trading calculator provides a whole range of other information associated with your proposed, or completed, trade. In the following sections, we will look in detail at how to use our Forex profit calculator.
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How to Use the Admirals Trading Calculator
In order to use the trading calculator, you must first enter the details of your proposed trade. Below is an image of the parameters to be filled out.
- Instrument: The currency pair you intend to trade.
- Lot: The size of your trade. 1 lot = 100,000 units of the base (first listed) currency.
- Leverage: The leverage you have access to on your Forex trading account. 1:30 is the maximum leverage available for a retail account, but this can go all the way up to 1:500 for a professional trader.
- Account Currency: The currency which you use in your account.
- Open Price: The price you open your trade at.
- Close Price: The price you close your trade at (or hope to close your trade at).
- Buy/Sell: Whether you are buying or selling the particular financial instrument.
Once everything has been filled out, press calculate in order to work out your Forex profit and other information. Below is an image of what the calculator will show you.
- Contract Size
- This shows the monetary value of the position in the account currency. As mentioned earlier, one lot is 100,000 units of the base currency.
- This indicates the amount of decimal places the currencies are quoted to. Here it is 0.00001 or five decimal places. All Forex pairs are quoted to five decimal points, except for pairs quoted in the Japanese Yen (JPY) which instead are only quoted to three.
- Pip Value
- Pip value shows the monetary value of a single pip in the account currency. A pip in Forex represents a movement in the fourth decimal place of the currency, except for pairs quoting in the JPY where it is the second decimal place. Therefore, the calculator allows you to see the profit per pip for your trade.
- In the above example, every single digit movement in the fourth decimal place equates to £7.66.
- Swap Short and Swap Long
- A swap fee is interest charged on a position held overnight. It is different depending on whether you buy (long) or sell (short) the financial instrument in question. Depending on the underlying instrument this interest could either be negative or positive.
- Margin at Current Market Price
- The margin shows how much capital is required to open and maintain your position. This figure in the Forex trading calculator is based on the leverage you have access to.
- You will note in the first screen we selected a leverage of 1:30 - meaning that the amount of capital required to open the position = 100,000 / 30 = £3,333.33
- The amount of commission charged by Admirals for the position. With an Admirals Trade.MT5 account, you can trade Forex commission free!
- Finally, you can see the calculated profit, or loss, from your Forex trade!
The Forex profit calculator is a useful tool to incorporate into your trading strategy. It can be used either when deciding to open a position or when looking at the costs and potential profit of your current position.
Using a trading calculator allows you to quickly access a lot of important information with a lot more ease than working it out for yourself with a calculator or an excel spreadsheet.
If you are interested in learning more about Forex trading, check out our beginner's guide to Forex!
Trade With Admirals
If you are feeling ready to start trading on the live markets, Admirals allows you trade the Forex market 24 hours a day, 5 days a week! You also get FREE access to MetaTrader 5, the world’s number 1 multi-asset platform. Click the banner below to get started!
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- Forex Trading Strategies Guide: 8 Strategies for 2023
- Overview of the Best MT5 Indicators
- Use MetaTrader Like a Pro With MT4 & MT5 Shortcuts
Admirals is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.