Forex Currency Trading Examples

Please note the following assumptions:

• On the MetaTrader4 platform 1 lot equals 100,000 of the first named currency.
• Pip values are calculated in the second named currency as exposure multiplied by smallest movement (4th decimal or 2nd decimal for JPY pairs). For example: 100,000 x 0.0001 = 10.
• Profit is calculated by (sell price - buy price) x contract size.
• The profit is converted to the account currency by the following calculation: Profit in quoted currency/exchange rate.

Example 1:

A client buys 1 lot of AUDUSD @ 0.7525.
The position is closed @ 0.7548.
Profit/Loss is calculated as 0.7548 - 0.7525 x 100,000 = US$230.
The profit/loss is converted to the account currency by the following calculation: 230/0.7548 = $304.71.

Example 2:

A client sells 0.5 lots of EURGBP @ 0.8790.
The position is closed @ 0.8803.
Profit/Loss is calculated as 0.8803 - 0.8790 x 50,000 = -GBP65.
The profit/loss is converted to the account currency by the following calculation: 65/0.4907 = -$132.46.

Example 3:

A client sells 0.5 lots of AUDJPY @ 75.05.
The position is closed @ 74.68.
Profit/Loss is calculated as 75.05 - 74.68 x 50,000 = JPY18,500.
The profit/loss is converted to the account currency by the following calculation: 18,500/74.68 = $247.72.