Last Updated on August 5, 2023 by cryptocreed
As a forex trader, you may have a hard time sitting in front of your computer screen, trying to decide whether or not to take a trade. You might have done your analysis, identified a potential entry point, and have a good idea of where you want to exit the trade. But there’s still one important question lingering in your mind: How much money can you make or lose from this trade? That’s where a Forex calculator comes into play, as it can help you by calculating the profits you have made in the currency of your choice. Let’s find out in detail how to use the calculator:
What Is A Forex Calculator?
Every trader wants to know the right position size, margin, leverage, and profits/loss made in the trade. However, it wasn’t possible to determine these things until the advent of the Forex calculator. Experienced traders used to calculate certain values on paper, which was an arduous task, But things have changed, and traders can now easily calculate different values precisely using a trading calculator.
Using this useful trading tool, traders can manage risk better, plan their trades more effectively, and gain insights into potential outcomes, all of which contribute to making informed trading decisions. Of all the trading calculators, the profit calculator is very popular, as it provides traders with accurate profit numbers they have made in different currencies.
Calculating Profits Using A Forex Calculator
Even though the Forex calculator does the work automatically without needing you to remember those heavy formulas, it doesn’t hurt to know it to understand the working of online calculators better.
This is how the profit and loss are calculated: (Close Price – Open Price) x Lot x Contract Size +/- Swap.
Close price: The Close Price is the price at which your position is closed.
Open Price: The Open Price is the price at which your position is placed.
Lot: The Lot is the volume of your position.
Contract size: Contract Size is the actual number of units of an asset in your position.
Swap: It is a fee charged for keeping a position open overnight.
Once you understand the formula, input your data into the calculator. Start by selecting the currency pair you want to trade and entering your Open and Close Prices. Next, enter your Lot size and Contract Size. If you’re unsure of your Contract Size, you can look it up on your broker’s website or ask their customer service team.
Finally, enter the Swap for the currency pair you’re trading. If you’re not sure of the Swap, you can also find this information on your broker’s website or your trading platform.
Once you’ve entered your data, hit “Calculate”, and you’ll see your potential profit or loss for the trade.
It’s important to note that the contract size and swap fees depend upon the asset being traded, so make sure you know the specific fees for the currency pair you’re trading. Additionally, some brokers may offer swap-free accounts, which can be used by traders following certain religious beliefs.
Forex Calculator – Top Features
Choose Your Currency Pair: A Forex profit calculator lets you choose from a range of currency pairs, including majors, minors, and exotics. So whether you’re into the euro, yen, or something more exotic, there’s a pair for you.
Calculate Your Position Size: With a Forex profit calculator, you can easily calculate your position size based on your account size, risk tolerance, and trading strategy. So you can make sure you’re not risking too much or too little on each trade.
Real-Time Market Data: Some forex profit calculators provide real-time market data, giving you a more accurate picture of the current market conditions. So you can make more informed trading decisions.
Factor in Margin and Leverage: A Forex profit calculator can also calculate the required margin and leverage for your trade. So you can ensure you’re not over-leveraging or risking more than you can afford to lose.
Predict Your Profit or Loss: A Forex profit calculator uses your trade size, entry price, and exit price to calculate your potential profit or loss. So you can see how much money you stand to make (or lose) before you even take the trade.
Why is the Forex calculator an essential Fx Tool?
Forex tools are created to simplify the trading process, and the Forex calculator is no different. Here are some of the pros of using this calculator:
Convenience and accessibility: One of the biggest advantages of using a trading calculator is its convenience and accessibility. Traders can use the calculator anywhere with an online connection, whether at home, in the office, on a train or bus, or just taking a break from their day job. You don’t have to be tied to your desk to make informed trading decisions.
Regularly updated: Make sure to consider a reputed website for using a Forex calculator, as they regularly update the calculator. Developers constantly add new features and functionalities to such software, ensuring that traders have access to the latest and most accurate information.
Compatibility with popular devices & operating systems: Forex calculator is generally compatible with all popular Internet browsers and devices, including laptops, PCs, tablets, and smartphones. Moreover, such applications may be run on all popular operating systems such as Windows, macOS, Linux, iOS, and Android. This means you can use the calculator on whichever device or operating system you prefer.
Low system requirements: Online profit calculators usually don’t have huge system requirements, so even novice traders who frequently don’t have powerful devices can use these apps. This feature is essential for traders who are just starting and may not have the budget to purchase expensive devices.
With a Forex calculator in your toolkit, you can make more informed trading decisions, knowing exactly how much money you stand to make or lose from each trade. So, the next time you’re faced with profitability, remember that a Forex calculator is here to help.