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  • How do I get profit from trades?

    Here is an example: After careful analysis a trader decides to buy EUR/JPY and makes an order at a price of 131.57 (Ask) for the amount of 400,000 EUR. Let us assume that he was right in his prediction, and after a while the quote for EUR/JPY rises to the level of 132.16, at which point the trader decides to fully close the position by selling 400,000 EUR.

    The financial result of this operation will be as follows:
    132.16 (closing price) — 131.57 (opening price ) = 0.59 or 59 pips (we get the difference in pips).

    In order to calculate the profit we have to multiply the pip difference by the volume of the order:
    0.59 x 400,000 = 236,000 — the result in the quote currency, i.e. JPY (Japanese Yen).

    It remains to convert the results into the trading account currency. Let’s assume that the trader has an account in USD. Suppose that at the moment of order closure the dollar against the yen (USD/JPY) was 107.19 (Bid) / 107.24 (Ask). To get those dollars one has to buy USD/JPY, i.e. to buy them at the Ask price — 107.24.

    So the profit calculated in US dollars will be:
    236,000 / 107.24 = 2200.67 USD.