Profit Calculator

Profit Calculator

In today’s article, we bring you another forex widget known as the profit calculator. Now this should sound interesting. Why do forex traders need a tool to help them calculate profits? This is what we shall examine shortly as it is important for traders to know what their profit targets are for a given time period as part of the forex trading strategy.

The Profit Calculator is powered by Investing.com.

 

Features of the Profit Calculator

What are the important features that a profit calculator has? The profit calculator widget is a simple tool. It features the following:

a)    A space in which the account currency can be entered. This is the currency that the trader maintains the account in.

b)    There is a space in which the trader can enter the currency pair being traded. This is a very important component of this forex widget as the currency pair traded can determine the extent of profit or loss that the trade sustains.

c)     There is a section for the trader to input the opening price for the trade. This is the price at which the trader’s order was executed and can be obtained from the “open positions” tab on the trader’s platform. If the trade is entered with a pending order, then it makes it possible for the trader to get this information even before trade execution.

d)    There is a space to enter what direction the trade was set: long or short.

e)    The trade size can be entered into its provided space. Here the financial worth of the contract is entered, not the lot size. For instance, a standard lot trade size would be represented as 100,000 and not 1.0 lots.

f)     The closing trade price is then entered. In the context of this article where we will describe how to use this tool, the closing trade price would have to be the proposed trade profit target.

How to Use the Forex Profit Calculator

This is what the profit calculator looks like:

profit calculator

The profit calculator in forex is a tool which is used to calculate profit. It is important to know how to do this as profit in forex is determined by a number of factors. Of course, it is important for the trader to know how the profit target is for any trade that he or she wants to get into, but what is the big picture here? Let us look at it from the standpoint of a long term trading strategy.

It is ok to want to make profits month in, month out. But what about trading for the long term? Have you ever thought of trying to compound a small amount of money into something much greater? Some good money that could finance a child’s education, finance that dream house or perhaps provide significant capital for that one big business? These are things that we all aspire to achieve, and it is indeed possible to use forex as a means of compounding little money for large gains over a 3 to 5 year period. Using the principle of compounding, a trader can decide how much percentage profit to target. After getting that amount in financial terms, the profit targets can then be distributed between a number of trades. The trader can then use the profit calculator to determine how many pips per trade will deliver on the profit targets.

Another application of this tool is for traders who want to make quick profits for the short term. The trader can decide on making $500 (or indeed any amount). Considering his account size and risk management, the trader can then use the profit calculator to decide what trade sizes will deliver on the targets, considering the entry price and the trade’s closing price. The trade sizes can then be adjusted accordingly.

Conclusion

The forex profit calculator is a must-have for every trader. We all have aspirations on how much money is to be made from our forex trading activity. With the forex profit calculator, a road map of how to achieve these targets can be constructed. We can then adjust certain parameters of our trade to match these targets. Things like the currency pair traded, the trade size, expected opening/closing price for trades, etc, are all parameters that can be adjusted with the aid of the profit calculator.

Adam

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Adam is an experienced financial trader who writes about Forex trading, binary options, technical analysis and more.

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