To calculate the profit or loss on a Forex or CFD trade, you compare the difference between the closing price and the opening price and then apply it to your position size. The formula depends on whether you took a long (buy) or short (sell) position:
- Long (Buy) Position:
Profit/Loss = (Closing Price−Opening Price) × Lots × Contract Size - Short (Sell) Position:
Profit/Loss = (Opening Price−Closing Price) × Lots × Contract Size
The result shows how much you’ve gained or lost based on the price movement and your trade size. Any commissions, spreads, or swap/rollover fees will affect your net profit or loss.
Trading platforms like MT4/MT5 calculate profit and loss automatically, but understanding the formula helps you plan your trades and manage risk more effectively.
