When trading currencies you will buy the currency at one price and sell at another.
As we mentioned that the price of currency change in fixed proportions are the points, the more the difference between the sale price and the purchase price means that you sold at several points higher purchase price.
As far as what will be a significant difference between the sale price and the purchase price will be the size of your loss or profit.
How can know the difference in points between the sale price and the purchase price? And whether this difference a profit or a loss?
You following three equations for each type of currency:
To determine the difference in points of the euro and the pound
The following equation can know the difference in points between the selling and buying rates of the euro and the British pound.
Spread = (sale price - purchase) * 10000
If the reference is credited the difference a profit and if the reference negative difference is a loss.
Example 1
And sold it at EUR / USD = .9890
How much difference in points between the buying and selling? Is it a profit or loss?
The answer:
Spread = (sale price - purchase) * 10000
= (9890. - 9850.) * 10,000 = 40
Which you sold a difference of 40 points profit. (Reference credited).
Example 2
Then I bought at GBP / USD = 1.5320
How much difference in points between the buying and selling? Is it a profit or loss?
The answer:
Spread = (sale price - purchase) * 10000
= (1.5289 - 1.5320) * 10000 = -37
Which you finished the deal a loss of 37 points. (Negative reference).
To determine the difference in points of the Swiss franc
The following equation you can see the difference in points between the selling and buying of the Swiss franc.
Spread = ((sale price - purchase price) * 10000) * -1
If the signal difference is credited profitable albeit minus the difference is a loss.
Example 1
Then sold it at USD / CHF = 1.4785
How many points difference? Is it a profit or loss?
The answer:
Spread = ((sale price - purchase price) * 10000) * -1
= ((1.4785 - 1.4827) * 10000) * -1 = 42
You finished the deal a winner 42 points. (Reference credited).
Example 2
Then I bought at USD / CHF = 1.3102
How many points difference? Is it a profit or loss?
The answer:
Spread = ((sale price - purchase price) * 10000) * -1
= ((1.3267 - 1.3102) * 10000) * -1 = -165
You terminated the deal, losing 165 points. (Negative reference).
To determine the difference in points for the JPY
The following equation can tell the difference between selling and buying rates for the Yen.
Spread = ((sale price - purchase price) * 100) * -1
If the signal difference is credited profitable albeit minus the difference is a loss.
Example 1
Then sold it at USD / JPY = 123.50
How many points difference? Is it a profit or loss?
The answer:
Spread = ((sale price - purchase price) * 100) * -1
= ((123.50 - 124.82) * 100) * -1 = 132
You terminated the deal a winner 132 points.
Example 2
Then I bought at USD / JPY = 125.27
How many points difference? Is it a profit or loss?
The answer:
Spread = ((sale price - purchase price) * 100) * -1
= ((126.03 - 125.27) * 100) * -1 = -76
You terminated the deal, losing 76 points.
You might guess the following question:
I know that I have sold the currency difference of 50 points profit, how mean actual profit from the money?
Answer: You will know shortly!!
It is important now is to know how to calculate the difference in points between selling and buying rates and whether you are a winner or a loser.
By using the previous three equations, each according to its own currency will be able to simply.
Must know you and after a simple practice will not need to return to the previous equations, but you will be able to calculate the points gap immediately and forget previous final equations!!
But we put in front of you a novice and we are confident that you soon will cut them forever!!aaa
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