Profit & Loss

We traded for profit, and by profit known:
It can buy at one price and sell at a higher price in the market bullish.
Or to sell at the price and buy at a lower price in the market bearish.
In both cases must be the selling price is higher than the purchase price.
But the winds do not blow ship!!
It expects that the price of the currency will rise whereupon purchase, but you may find that the price of the currency fell Contrary to your expectations, and this Sidaok because sells at a lower price than the purchase price and thus will suffer from the loss.
This happens in any field of trade anyway ...
It is important to you, of course, that you know how to calculate a result of a deal you've made on a currency .. Whether it made a profit or loss.
In order to learn the profit or loss on any currency use the following equation:
Profit or Loss = number of contracts (Lute) * difference in points * point value.
If the result is positive though profit was a negative output loss.
Take the examples assuming we are dealing with a company has a point value for each currency equal to the values ​​that we have mentioned in the previous page.
Example 1

Then sold it at GBP / USD = 1.5085
How much profit or loss made by?
The answer:
I daresay first points of difference equation for the pound and the euro.
Spread = (sale price - purchase) * 10000
            = (1.5085 - 1.4926) * 10000 = 159
We sold 159 points profit margin
Now calculate actual profit:
Profit or Loss = number of contracts (Lute) * difference in points * point value.
                  = 1 * 159 * 10 = 1590 $ on the basis that one point worth LE = $ 10
We have made a profit = 1590 $
 Example 2

And sold it at EUR / USD = .9793
Vahsb how much profit or loss?
The answer:
I daresay first points of difference equation for the pound and the euro.
Spread = (sale price - purchase) * 10000
           = (9793. - 9762.) * 10000 = 31
We sold a difference of 31 points profit.
Now calculate how actually won
Profit or Loss = number of contracts (Lute) * difference in points * point value.
                  = 2 * 31 * 10 = 620 $ on the basis of the value of one point for the euro = $ 10
 We won in this deal is $ 620
Example 3

And sold it at USD / JPY = 123.62
Vahsb profit or loss
The answer:
I daresay first points of difference equation for Palin.
Spread = ((sale price - purchase price) * 100) * -1
            = (123.62 - 123.08) * 100) * -1 = -54 points loss
That's because we bought the yen rate and we sold at a lower price Valin currency indirectly.
Now calculate the actual loss
Profit or Loss = number of contracts (Lute) * difference in points * point value.
                  = 3 * - 54 * 8 = - 1296 $ on the basis that the price point per Lin = $ 8
 We have lost in this transaction 1296 dollars.
Example 4

Then I bought at USD / CHF = 1.4500
Vahsb profit or loss
The answer:
I daresay first points of difference equation francs
Spread = ((sale price - purchase price) * 10000) * -1
            = ((1.4356 - 1.4500) * 10000) * -1 = 144 points profit
And so we sold the franc at a higher price than purchasing currency Vafrenk not directly.
Now calculate the effective profit
Profit or Loss = number of contracts (Lute) * difference in points * point value.
                  = 4 * 144 * 6 = 3456 $
We won from selling us for 4 Lott of Alfrenk then our purchase him at a lower price amount 3456 $
And now you can see profit Oalkhsarh any deal as long as you learn point value of each currency and the volume of the contract Sttajer it, which is information that may be obtained from the brokerage firm, which will choose to work with them, though the size of the points mentioned in the previous examples and the size of the contracts is the size most commonly between brokerage firms in the currency market.

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PIP value

Imagine that there is a dealer has a commodity to transfer alarm hours imported from abroad at a cost of $ 10 per hour, it is no doubt must be sold at a higher price of $ 10 to achieve a profit .. but how many will achieve a profit?
This depends on the profit margin of any difference between the sale price and the purchase price.
If you decided to sell one-time price of $ 15 per hour and had 1000 hours, will receive a profit of $ 5,000.
But what if he decided or been forced to sell watches a simple profit margin of no more than $ ¼?
Will profit on the 1000 hour = $ 250 only, because the profit margin is too narrow.
If he wants to get a larger profit this narrow margin, he should sell larger quantities of watches.
If sold 10,000 hours at a profit ¼ time will profit = $ 2,500, a good profit got it to sell a large amount of hours to compensate for tight profit margins.
As well as the currency too ..
The prices have changed parts of the ground most of the time, if I bought a small amount of currency and sold it at a higher price segments from the ground no doubt that you will not get on the profit for the glory.
In order to be able to get a good profit in this minor changes to the currency, they must buy and sell large amounts of currency.
To calculate it together to see the difference:


Flanry how the euro will win the high one point when we buy 1000 euros.
When we buy 1,000 euros against which we will pay 985 $, any Snepa 985 $.
Now you have a 1000 euros.

 We will sell what we have of the euro, we will sell the 1000 euros and will get an interview on 985.1 $ at the new price.
Profit = Price - price
      = 985.1 - 985 = 1 or 10 cents
Any profit resulting from the sale of 1,000 euros at the height of one point is 10 cents.
If we assume we sold the euro at a height of 50 points will be won $ 5. (50 points * .10 for Nqthaluahdh).
It is a simple profit not worth it ..!!
But what if we bought 100,000 euros instead of 1,000 euros on the same previous price?
Will buy 100,000 euros and against which we will pay 98500 $ on the first price.
Us now 100,000 euros.
When we sell the euro after the price rises one point we will get 98510 $.
Profit = Price - price
      = 98510 - 98500 = $ 10
Any profit resulting from the sale of 100,000 euros at the height of one point is $ 10.
If we assume we sold the euro at a height of 50 points will be won $ 500 (50 points * $ 10 per point).
A good profit .. Is not it?
So you see that when you buy or sell large amounts of currency can achieve a good profit, but if traded in small amounts of currency will not get a worthwhile profit.
And also considers the former examples You Buying the 1000 Euros got 10 cents for every point.
You Buying the 100,000 euros got $ 10 for each point.
One who determines the value of the point is the size of the amount you buy or sell any currency value croaker, or the size of the contract.
Therefore, less size for trading the currency market is 100,000 of the base currency or close to that amount by the company you are dealing with, because large amounts of currency is the good earnings less unchanged currency prices.
So it is very essential to know the value of the point on the each Sttajer currency with a company that will deal with it.
Will not need to ask, the first things that will tell you the brokerage company before dealing with them is the point value of each currency although not telling you must be sure of yourself.
As mentioned, the point value calculated by contract size of any by the amount of the amount you buy or sell the currency and whenever this sum is greater whenever the value of the point more as noted in the examples of former when we bought a small amount € 1000 and when we bought a large amount 100,000 euros.
Because the size of the contract varies from one company to another, the point values ​​on each currency varies from company to company.
Despite these differences we have said that the size of the contract for the majority of brokerage firms is now 100,000 of the base currency, Fbmthel this size What will be the value of the point?
Answer: You will be the point value on each lot as follows:
One point worth of euros = $ 10.
Point value per pound = $ 10.
 One point worth JPY = approximately $ 8.
One point worth of the Swiss franc = $ 6 approx.
Although these values ​​vary from company to company but it is true for most companies.

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Contract size

You know that all goods and services bought and sold on the basis of fixed units.
We buy meat and selling it is kilogram unit.
And buy gold and sell unit is love.
It is rare to buy one product or service without unit sold because it makes somewhat complex calculation Moreover, it is unusual.
The currency is bought and sold on the basis of fixed units also called Unity Lott LOT.
They are less extent can be traded in the currency market.
Lot LOT: is the minimum can be traded in the currency market and can not be traded only or Bamadaafath.
You can buy a lot of the euro or 2 lots, 3 lots or 20 Lott ... Etc.
But You may buy Lott and a half or Lott and a quarter, but multiples only croaker.
But how much equals a lot of the euro or any other currency?
Varies depending on the brokerage firm that will deal with them ..
Called the equivalent value of a currency croaker size of the contract contract size.
Although the lot size varies from company to company but the lot size for most brokerage firms currently is 100,000 units of the base currency.
What does that mean?
This means, when you ask your purchase Lott euros will buy 100,000 Euros and will pay the price in U.S. dollars by price at the time, because the euro is the base currency against the dollar.
When you request to buy Lott LE will buy £ 100,000 and will pay - sold - against which the U.S. dollar by price at the time.
But when you ask to buy Lott yen will buy yen, equivalent to $ 100,000 because the dollar is the base currency against the yen. And when you ask for the sale Lott yen sold the equivalent of $ 100,000 Yen.
As well as for the Swiss franc Ftdma buy Lott requests will be buying Swiss francs equivalent to $ 100,000 and sold the equivalent of $ 100,000 of the franc in the case of a request selling the franc since the dollar is the base currency against the Swiss franc.
In any case if you find it difficult to understand what we explained, do not worry!!
Important because you will know later

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Determine the number of points

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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Assess the currency in international exchange

Currency rates change all the time, and this is often a slight change many do not notice.
It changes slightly to talk a little difference in the amounts of physical meager, but make a big difference with large sums of money.
So the speculators are keen to monitor the smallest change in the prices of currencies to take advantage of it in order to achieve trading profits.
This surveillance is currency even part of the ten thousand part for the euro and the pound and the franc and most other currencies, and even part of the surveillance percent percent for the JPY.
Do not panic issue is easier than you think ..!!
What does that mean?

Any four digits after the comma (part of the ten thousand part).

 Any four digits after the comma (part of the ten thousand part).

Any four digits after the comma (part of the ten thousand part).

That is, until two digits after the comma (one part of one hundred percent).
Less change can happen in the pound and the euro and the franc is .0001
The smallest change can happen in the yen is .01
Called lower part can happen to point currency POINT OR PIP.

He then became: EUR / USD = .9826 Climate .0001
We say that the euro rose one point against the dollar one pip.

He then became: EUR / USD = .9824
We say that the Euro was down one point against the dollar.
As well as for LE

He then became GBP / USD = 1.5254 Climate .0001
Say that the pound rose one point against the dollar.

We say that the pound has dropped one point against the dollar.
As well as for the Swiss franc with the observation that the franc and the two currencies Garmbachertan yen rise in the number before them means Ankhvadhma and vice versa.

He then became: USD / CHF = 1.4235 Climate .0001
We say that the franc has risen one point against the dollar.
But if it becomes: USD / CHF = 1.4237
We say that the franc has dropped one point against the dollar.
As for the yen

He then became USD / JPY = 120.51 Change .01
We say that the yen has dropped a point against the dollar.
But if he became USD / JPY = 120.49
We say that the yen has risen a point against the dollar.

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Currency rate changes in the international currency market

Constantly changing currency rates and the second round!!
The change is either up or down.

He then became EUR / USD = 1
What does that mean?
We were at the first price required to pay .98 $ for one euro.
Then we became the second price required to pay $ 1 for one euro.
This means that we have become required to pay a larger amount of dollar for the euro, that the euro has become too precious.
This means that the euro rose and the dollar fell, the rise in the currency is the corresponding decline of the currency necessarily.

He then became GBP / USD = 1.5
What does that mean?
This means that the pound rose and the dollar fell.
Because we are at the first price we were required to pay $ 1.3 for one pound second price greet demanding payment of $ 1.5 for one pound
We we are required to pay a larger amount of dollar for dollar, meaning that the pound has become too precious.
Which means that it rose and the dollar fell.
Always remember: the price is the amount required payment of the second currency for one unit of the base currency.
Take more examples:
Example 1

Became: EUR / USD = 1.01
Is euro rose or fell?
Answer: The euro rose and the dollar fell because we are required to pay a larger amount of dollar for one euro.
Example 2

Became: EUR / USD = .90
Is euro rose or fell?
Answer: The euro fell and the dollar rose because we are required to pay how much less than a dollar for one euro.
Example 3

Became: GBP / USD = 1.2
Is Fairy rose or fell?.
Answer: I've dropped the pound and the dollar rose because we are required to pay how much less than a dollar for one pound.
Example 4

Became: GBP / USD = 1.69
Is Fairy rose or fell?
Answer: The pound rose and the dollar fell because we are required to pay a larger amount of dollar to get one pound.
Thus became know whether direct currency has risen or fallen.
And now ..

He then became: USD / JPY = 120
Is yen rose or fell?
We were required to pay 125 yen for one dollar.
We are required to pay 120 yen for one dollar.
Any that we are required to pay how much less than the yen for dollars and one that the yen has become too precious quantity of less than $ get and this means that the yen rose and the dollar fell.
Remember that price is the amount owed from the second currency for one unit of the base currency.
The base currency is the dollar against the yen and the franc.
 
He then became: USD / JPY = 130
Is yen rose or fell?
Answer: The yen fell because we are required to pay how much more of it to get one dollar means that the dollar has become the most valuable and the most expensive and as long as the dollar has become the most precious he rose to be the yen has fallen.
As you can see it against the yen and the franc rising number mean Ankhvadhma because figure refers to the dollar is the base currency if the dollar rose fell yen or franc.
Take the examples:
Example 1

He then became: USD / JPY = 128
Is yen rose or fell?
Answer: The yen fell because we are required to pay how much more of it to get the dollars so doing, the yen has fallen and the dollar has risen.
Example 2

He then became: USD / JPY = 127
Is yen rose or fell?
Answer: The yen has risen because we are in the final price required to pay how much less than the yen for dollars and yen has thus risen and become the most valuable and the dollar has fallen.
Example 3

He then became: USD / CHF = 1.40
Is franc rose or fell?
Answer: The franc has risen because we were required to pay 1.42 francs for dollars, but now I greet you required to pay how much less 1.4 francs for dollars, it means that the franc has become the most valuable and rose and the dollar has dropped.
Example 4

He then became: USD / CHF = 1.78
Is franc rose or fell?
A: I have fallen franc and the dollar rose because we are required to pay a larger amount of the franc for one dollar.
Thus became know whether the price has risen or fallen in the indirect currency.
It is important to the extent that you know the difference between the price in the direct currency and price in the indirect currency.
General rule
If price rose against the pound or euro means Artvallma and the dollar's decline.
If declined against the pound, euro or means Ankhvadhma and rising dollar.
And vice versa for the yen and franc
If the price rose against the yen or the franc means Ankhvadhma and rising dollar.
If dropped against the yen or the franc means Artvallma and the dollar's decline.

The reason for this is that the base currency are the pound and the euro against the dollar, either against the yen or the franc A base currency is the dollar.
Price as you know is the amount required batch of second currency for one unit of the base currency.
As mentioned, it is important to know whether the currency has fallen or risen because if you did not realize it has good buy at the time you want to sell it, and vice versa!!.
Anyway .. If you find some difficulty in understanding the difference, do not worry ..
A little practice will become things very easy for you.
Only save the previous rule, Sinfek remember the following chart.

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Direct and indirect currencies

The terminology in the currency market to be the euro and the pound sterling two base currencies against the dollar, and therefore are placed Rmazihma first
As follows: EUR / USD and GBP / USD.
And the price, which is placed in front of any of the previous versions is the amount required to pay the dollar for one euro or one pound.
When we say: EUR / USD = .9000
This means that to be paid from the dollar = .9000 for one euro.
And when we say: GBP / USD = 1.5000
This means that to be paid from the dollar = 1.5000 for one pound.
Currencies that are called is the base currency against the U.S. dollar denominated direct.
 Currency Direct
Which currencies, Inc. placed before the dollar symbol and be the base currency
The most important of these currencies in the international currency market is
Euro EUR / USD
British pound GBP / USD
Australian dollar AUD / USD

It was the terminology in the currency market that the U.S. dollar is the base currency against the yen and the Swiss franc. Thus dollar sign will be placed first in the formula and then placed symbol yen or franc.
As follows: USD / JPY and USD / CHF.
When we say: USD / JPY = 120
This means that to be paid from the yen = 120 yen for one dollar. Since the dollar is the base currency.
And when we say: USD / CHF = 1.4000
This means that to be paid from the franc = 1.4000 for one dollar.
Called currency against which the dollar is the base currency indirect currency.
 Currency indirect
Which currencies U.S. dollar sign will be placed before the dollar is the base currency
The most important of these currencies in the international currency market is
JPY USD / JPY
Swiss Franc USD / CHF
Canadian Dollar USD / CAD

Why was the terminology that the euro and the pound sterling from direct currency while the yen and the franc currency indirect?
ANSWER: It's just a convention!!
Perhaps the purpose of simplification, if we want to know how much dollars must be paid for on the yen and one that requires a lot of fractures, so the dollar against the franc and the yen is the base currency.
In fact, this difference in status between currencies symbols direct and indirect effects on a lot of things that will Tkablk later.

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