Profit & Loss Calculator
Estimate your profit or loss before entering a trade.
Profit / Loss
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Formula
Pips = |Exit − Entry| ÷ Pip Size
P&L = Pips × Pip Value × Lots
Direction determines profit vs loss: a Buy profits when exit > entry.
How to Calculate Forex Profit and Loss
Your profit or loss on a forex trade is determined by three factors: the number of pips you captured, the pip value for the currency pair you traded, and how many lots you traded. Knowing your potential P&L before entering a trade is essential for setting realistic take-profit levels and evaluating your risk-to-reward ratio.
Professional Gulf traders target a minimum 1:2 risk-to-reward ratio - meaning for every pip they risk (stop-loss), they aim to capture at least 2 pips of profit (take-profit). This ensures profitability even with a 40% win rate.
Profit & Loss Formula
Formula:
Buy Example:
Buy 1 lot EUR/USD · Entry: 1.0900 · Exit: 1.0950 · Pip value: $10
Pips gained = (1.0950 − 1.0900) ÷ 0.0001 = 50 pips
Profit = 50 × $10 × 1 = +$500
P&L = (Exit − Entry) ÷ Pip Size × Pip Value × LotsBuy Example:
Buy 1 lot EUR/USD · Entry: 1.0900 · Exit: 1.0950 · Pip value: $10
Pips gained = (1.0950 − 1.0900) ÷ 0.0001 = 50 pips
Profit = 50 × $10 × 1 = +$500
P&L Examples by Lot Size (EUR/USD, 50-pip move)
| Lot Size | Units | Pip Value | 50-pip Profit |
|---|---|---|---|
| 0.01 lots | 1,000 | $0.10 | $5.00 |
| 0.10 lots | 10,000 | $1.00 | $50.00 |
| 0.50 lots | 50,000 | $5.00 | $250.00 |
| 1.00 lot | 100,000 | $10.00 | $500.00 |
Frequently Asked Questions
How is forex profit calculated?
Forex profit is calculated by multiplying the number of pips gained by the pip value and lot size. For EUR/USD (pip value $10 per standard lot): if you buy 1 lot at 1.0900 and close at 1.0950, that is 50 pips profit = $500. For a sell trade, profit comes when the price moves down from your entry.
Does profit calculation differ for JPY pairs?
Yes. For JPY pairs (USD/JPY, EUR/JPY, etc.), a pip is 0.01 instead of 0.0001, and the pip value in USD depends on the current exchange rate. The profit calculator automatically handles JPY pairs differently from standard major pairs.
What is a good risk-to-reward ratio in forex?
A risk-to-reward ratio of 1:2 or better is considered professional. This means for every 20 pips you risk (stop-loss), you target at least 40 pips of profit (take-profit). At a 1:2 ratio, you only need to win 34% of your trades to break even - making consistent profitability achievable even without a high win rate.