Level 3 · Lesson 9 of 12 · 5 min read
How to Calculate Forex Profit and Loss
The P/L math behind any trade, on any pair, step by step.
Researched and written by Laurent The Basic P/L Calculation
The profit or loss on a forex trade is calculated from the difference between your entry and exit prices, multiplied by the position size.
For Buy (Long) Trades:
P/L = (Close Price - Open Price) x Lots x Contract Size
For Sell (Short) Trades:
P/L = (Open Price - Close Price) x Lots x Contract Size
Worked Examples
Example 1: Buy EUR/USD
Entry:Buy 0.10 lots at 1.0850
Exit:Close at 1.0895
Pips gained:45 pips
Calculation:(1.0895 - 1.0850) x 0.10 x 100,000 = $45
Profit: +$45
Example 2: Sell GBP/USD
Entry:Sell 0.05 lots at 1.2700
Exit:Close at 1.2740
Pips lost:40 pips (price went against you)
Calculation:(1.2700 - 1.2740) x 0.05 x 100,000 = -$20
Loss: -$20
Total Cost of a Trade
Your true net P/L includes more than just the price movement:
Net P/L = Gross P/L - Spread Cost - Commission - Swap
- Spread cost: Lot size x spread (in pips) x pip value
- Commission: Some ECN brokers charge $3-7 per lot (round-turn)
- Swap: Only if held overnight (positive or negative)
Use our calculator. For anything beyond the simplest USD-quoted pairs, use the Profit/Loss Calculator. It handles conversion rates, commissions, and swap automatically. Don't risk getting the math wrong on a live trade.
Key Takeaways
- • Buy trade P/L = (close - open) x lot size x contract size.
- • Sell trade P/L = (open - close) x lot size x contract size.
- • For USD-quoted pairs, pip value is straightforward. For others, conversion is needed.
- • Always factor in spread, commission, and swap for true net P/L.