i am a newbie to forex.. is there an easy way or calculator to determine what percent gain or loss I currently have on an open position??? for some reason all they seem to talk about is pips profit and loss... whereas it seems the most important thing is percent you are up or down.. for example...: lets say you buy 1 lot of EUR/ USD at 1.2055 and that you sell at 1.2300 so i think that means 100,000 euro long how do I calculate how much percent I am up on this trade? TIA
I go by profit or loss based on account balance not each trade. Example: $1000 in account and you have an open trade that pays $1.00 per pip and you are up 10 pips ($10.00). Current profit = 1% Same trade but a $10,000 acount balance. Current profit = 0.1%
Here's one good forex P&L calculator: http://www.oanda.com/products/fxmath/profit.shtml Note: 1 lot = 100,000 units. In your example, profit is USD 2,450. Divide that P&L number by your beginning account balance, before the trade, to get % return at the account level. If you really wanted to know % return for this trade, you could divide that P&L by the amount of capital employed, i.e., margin used. E.g., at 2% margin (50:1 leverage), you would need at least $120,550 x 2% = $2,411 in available funds, in order to buy 1 lot of EUR/USD @1.2055. Your % return for this trade then would be $2,450 / $2,411 = 102%. (Which is exactly what you'd expect from capturing a 2.03% move at 50:1 leverage.)
Look at this Journal for a spreadsheet that calculates lots of stuff... http://www.elitetrader.com/vb/showthread.php?s=&threadid=48230 Michael B.
You're asking 2 questions and also have one alternate ending. Let's take your 1st Q. is there an easy way or calculator to determine what percent gain or loss I currently have on an open position??? On an OPEN position you can calculate how much % you are up or down, on either your overall account balance OR on the money you have exposed to margin, that can be shown as Margin Used on some trading platforms. It's simple math as explained by another member. When you open a trade you actually have two balances. Your total acct balance, and the balance you have exposed to the market (or, to margin). You also have a balance i.e. your Unrealized Profit/Loss. So... if you have $10,000 in your acct, you open a 100,000-unit trade long on EUR/USD at 1.2055 (we'll presume you're using 50:1 leverage (or, "margin")) and the rate climbs to 1.2300 while you are still in the trade your Unrealized P/L indicator will be showing that you are $2450 in profit. Your pips indicator will be showing 245 pips in Profit. 100,000-unit trade = $10 per point/(pip) on EUR/USD X 245-pips = $2450. That's 24.5% of your $10,000 account balance. Not bad shooting. What IS bad is that you used almost 25% of your entire acct balance on a single trade. You should be bull-whipped for that because you're not trading, you're gambling. And you'll be bagged within a week trading that way in the forex. Now, presuming you're using 50:1 margin, you exposed $2406.80 of your money to the market (to margin) so you'd be up on your open trade over 100% on your money exposed to the market. At this point your Unrealized P/L would also be showing the same profit % as you'd calculate on your acct Balance, that is the $2450, or 24.5%. Second question: lets say you buy 1 lot of EUR/ USD at 1.2055 and that you sell at 1.2300. You wouldn't "sell" at your TP (take profit or target profit) of 1.2300, you would close (your open long trade). The maneuver could be done by entering a market order at the 1.2300 rate/price but you can just close it, or set a sell limit order for 100,000 units at 1.2300. Next question: so i think that means 100,000 euro long. No, it doesn't. The "100,000" is your trade size (number of units) you selected. Depending on the broker you use you can choose different unit amounts, ranging to over 100,000-units all the way down to 1-unit. You don't have to be locked into making 100,000-unit trades. The "euro" is the currency you chose to open a long/buy position on. The "long" is your trade direction (buy). Remember that if you are long euro you are short (sell) the other currency euro is paired with. Good luck, trc49492, and welcome to the pit.