How Do You Calculate Profit & Losses In FOREX?
Forex, short for foreign exchange, is the largest market in the world. Every day, traders exchange trillions of dollars worth of currency in the Forex market. Liquidity, leverage and ease of accessibility are some of the major factors that entice speculators to trade the foreign exchange markets. Calculating profit and losses in Forex can seem like a daunting task. Many different currencies are traded in the Forex markets and market participants trade contracts of varying sizes. Additionally, Forex offers the potential for leverage, meaning that you can control a contract for a fraction of its full value. Despite all these factors, you can calculate profit and loss by following a few simple steps. Identify the contract size. A standard Forex contract consists of 100,000 units of the base currency. For example, one EUR/USD contract represents 100,000 Euros valued in terms of U.S. Dollars. A mini contract is one tenth of the size of a standard contract and represents 10,000 units of the
