How do I calculate profits and losses?
Now that you know how forex is traded, itís time to learn how to calculate your profits and losses. When you close out a trade, take the price (exchange rate) when selling the base currency and subtract the price when buying the base currency, then multiply the difference by the transaction size. That will give you your profit or loss.
Price (exchange rate) when selling the base currency Ė price when buying the base currency X transaction size = profit or loss
Letís look at an example.