Calculating Profit in Forex Trading with Marketiva

Posted on August 21, 2008. Filed under: Asiativa | Tags: calculate profit, forex, income, leverage, margin, marketiva, point |

How To Calculate Profit in Marketiva

The objective of trading is to buy a market instrument and later sell the same market instrument for a higher price. In case of margin trading, trader can also sell a market instrument first and later buy the same market instrument for a lower price. Either way, trader has to close position in order to lock in the profit.

Let us assume that you open a long position by buying a market instrument for 129.38 (quantity of 10000) and few hours after that, you close the position by selling it for 129.52 (same quantity of 10000). These two trades would bring you profit of (129.52 – 129.38) * 10000 = 1400.

We can also say that these two trades would bring you 14 “points” profit. A “point” is the smallest increment in an instrument’s price. For the instrument in the above example, one point is 0.01 and for an instrument denominated with 4 decimals, one point would be 0.0001. Expressing position profits in points is often very useful for quick calculations and estimates.

It is very easy to calculate profit in Marketiva. All you need to do is look at the profit column. If it is green with positive, it is your profit in USD. That’s it. Simple !!!

~ Jayasena – Professional Private Trader

One point, from the example position above, would bring you 0.01 * 10000 = 100 profit, denominated in the same currency the market instrument is denominated in.

In case of Forex, currency pair denomination will be in the counter currency (JPY is the counter or quote currency in the USD/JPY pair) and you may need additional currency conversion to get profit calculated in the currency your trading account is denominated in.

First to trade Forex ? Try Marketiva in the first place. It is simple, easy, and claim your free $5 for your account to start trading. Register using the link below and get every benefit to join our international Chat room to discuss Forex related issues, signal with other trader !!!