A simple way to calculate profits and losses in FX
Calculate profit and loss to prevent steady wins turning into a big loss
Cumulative gains turning into a big loss is the eternal theme for FX traders...
What is "Cumulative gains, big loss"?
↓ The pattern I always fall into (laughs)
After a winning streak, ego grows, greed leads to higher leverage (trade lot size),
and finally all profits are blown away, resulting in a big loss
How to prevent it
Surprisingly simple
1. When entering a trade, always set a stop loss
2. From the stop loss, calculate the entry lot size so that the loss is within a certain amount
3. The stop value does not move
Keeping the loss amount constant is important
Losses can be controlled by yourself!
Example) USD/JPY when you want to buy at 114 yen
1. Set stop loss, e.g., at 113 yen.
(The basis for the stop loss varies with trading style,
scalping, day trading, swinging—timeframes differ, so the stop-loss width also differs)
2. Maximum loss, e.g., within 10,000 yen.
3. Under conditions 1 and 2, the entry will be within 10,000 currency units
(This is theoretical; does not account for spreads, etc.)
That said...
Cross currencies like USD/JPY are relatively easy to calculate, but
other currencies such as EUR/USD, AUD/NZD are more complicated
calculations can be quite bothersome.
Therefore, profit and loss can be calculated simplywith the “FX Trading Profit Simulator”let's calculate using it.
Please read the article that explains how to use it
http://fx-shosinsya.com/2018/10/03/fx-profit-simulator/
