How to Calculate Profit and Loss in Forex

Every forex trade ends with one number: how much money it made or lost. That number is not mysterious — it is the price change multiplied by the size of the position, converted into the currency your account is held in. This guide shows the formula two ways, works through it on a major pair, a yen pair and gold, and then subtracts the costs that separate gross profit from what actually lands in your balance.

The core formula

A currency pair is quoted as base/quote. When you trade it, profit or loss is first produced in the quote currency:

P/L (quote currency) = (close price − open price) × units for a buy P/L (quote currency) = (open price − close price) × units for a sell

Units are lots × contract size: one standard lot is 100,000 units, a mini lot 10,000, a micro lot 1,000.

If the quote currency is not your account currency, one more step converts the result at the current exchange rate.

The same thing in pips

Most traders think in pips rather than raw prices, and the formula has an equivalent form:

P/L = pips gained or lost × pip value per lot × lots

On any pair quoted in USD (EUR/USD, GBP/USD, AUD/USD) with a USD account, one pip on one standard lot is worth $10. That makes the arithmetic quick: pips × $10 × lots.

Example 1: buying EUR/USD

You buy 1 standard lot of EUR/USD at 1.0850 and close at 1.0900.

• Price change = 1.0900 − 1.0850 = 0.0050, which is 50 pips
• Price method: 0.0050 × 100,000 = $500
• Pip method: 50 × $10 × 1 = $500

Both routes give the same answer — they are the same formula written two ways.

Example 2: selling GBP/USD

You sell 0.5 lot of GBP/USD at 1.2700 and buy it back at 1.2650.

• A sell profits when price falls: 1.2700 − 1.2650 = 0.0050 = 50 pips
• Pip value on 0.5 lot = $5
• P/L = 50 × $5 = +$250

Had price risen to 1.2750 instead, the same 50 pips would have been a −$250 loss. Direction decides the sign; size decides the amount.

Example 3: a yen pair (USD/JPY)

On JPY pairs a pip is the second decimal place (0.01), and profit arrives in yen.

You buy 0.2 lot (20,000 units) of USD/JPY at 150.00 and close at 149.20.

• Price change = 149.20 − 150.00 = −0.80, which is −80 pips
• P/L in yen = −0.80 × 20,000 = −¥16,000
• Converted to a USD account at the closing rate: −16,000 ÷ 149.20 = −$107.24

This conversion step is exactly where hand calculations go wrong. The pip value on USD/JPY is not $10 per lot — it moves with the exchange rate.

Example 4: gold (XAU/USD)

One lot of gold is usually 100 ounces, so each $1 of price movement is $100 per lot.

You buy 0.1 lot (10 ounces) at $2,400 and close at $2,415.

• Price change = +$15
• P/L = 15 × 10 = +$150

Contract sizes on metals and CFDs vary between brokers, so check the specification on your platform before relying on 100 ounces.

When your account is not in USD

Profit is produced in the quote currency, then converted. With a EUR account, the $500 from Example 1 becomes:

• $500 ÷ 1.0900 (EUR/USD at close) = €458.72

The trade was identical; only the currency it was measured in changed.

Gross versus net profit

The formulas above give gross P/L. Three costs come out of it:

Cost	When it applies	How it shows up
Spread	Every trade	Built into the entry price — you start slightly negative
Commission	Raw/ECN accounts	A fixed amount per lot, often charged on open and close
Swap	Positions held past rollover	Credited or debited each night

Take Example 1 on a raw-spread account charging $7 commission per lot round turn, held for two nights at −$6 swap per night:

• Gross = $500
• Commission = −$7
• Swap = −$12
• Net = $481

On a short scalp the costs are small next to the gross result; on a small target or a long hold they can take a large share of it. Our guide to trading costs breaks each one down.

Floating and realized P/L

While a position is open its profit or loss is floating: it changes with every tick and is already counted in your equity. It becomes realized — added to or taken from your balance — only when the position is closed. A floating profit is not money you have yet; a floating loss still counts against your margin level.

Calculating before the trade, not after

The most useful P/L calculation is the one you do before you click buy: what the trade loses if the stop loss is hit, and what it makes if the target is reached. The profit and loss calculator takes the pair, direction, lot size, entry and exit and returns the result in your account currency, conversions included. The pip calculator gives the pip value for any pair and lot size, and the risk/reward calculator compares the two outcomes side by side.

Key takeaways

• P/L = price change × units, produced in the quote currency, then converted to your account currency.
• The pip form is equivalent: pips × pip value per lot × lots. On USD-quoted pairs with a USD account, one pip on one lot is $10.
• A buy profits when price rises; a sell profits when price falls.
• JPY pairs and non-USD accounts need a conversion step — the most common source of mistakes.
• Spread, commission and swap turn gross profit into net profit.
• Floating P/L counts toward equity but is only realized when the position closes.

YenPip calculators are estimation tools, not financial advice. Actual results depend on your broker's prices, contract sizes, commissions and swap rates.