How to Calculate Profit on a Forex Trade

Calculating profit on a forex trade is a core skill for any trader. The gross profit depends on the direction of the trade, the entry and exit prices, the pip value of the pair, and the lot size. The net profit (what you actually keep) is the gross profit minus the spread, commission where applicable, and any overnight swap charges.

This guide walks through the profit formula, worked examples for both USD-quoted and JPY-quoted pairs, and how to factor in trading costs to arrive at net P&L.

What Determines Profit on a Forex Trade

Four variables determine the gross profit on a forex trade.

The direction of the trade. A long position profits when the price rises; a short position profits when the price falls. Get the direction right and the magnitude of the price move determines the size of the profit.

The price move in pips. A pip is the smallest standard increment of price for most forex pairs. For most major pairs quoted to four decimal places, one pip is 0.0001. For JPY-quoted pairs (quoted to two decimal places), one pip is 0.01.

The pip value per lot. This is the monetary value of a one-pip move, expressed in the quote currency of the pair, multiplied by the lot size. For one standard lot (100,000 units of the base currency) on a USD-quoted pair such as EURUSD, one pip equals USD 10. For JPY-quoted pairs, one pip equals JPY 1,000 per standard lot.

The lot size. A standard lot is 100,000 units of the base currency. The minimum tradeable size at TIOmarkets is 0.01 lots on Standard, Raw, and VIP Black accounts, and 0.001 lots on the Nano account.

The Basic Profit Formula

The simplest way to calculate gross profit on a forex trade is:

Gross profit = (Exit price - Entry price) x Lot size in base currency units

For a long trade, a positive figure means a profit; a negative figure means a loss. For a short trade, reverse the sign of the price difference (entry minus exit).

The pip-based equivalent of this formula is:

Gross profit = Price move in pips x Pip value per lot x Number of lots

Both formulas produce the same result. The pip-based method is often more intuitive because traders typically think in pips.

Worked Examples

Long Trade on a USD-Quoted Pair

Assume the following:

• Pair: EURUSD
• Direction: Long
• Entry: 1.0850
• Exit: 1.0900
• Lot size: 1.0 standard lot
• Account currency: USD

Step 1: Calculate the price move. 1.0900 - 1.0850 = 0.0050, or 50 pips.

Step 2: Apply the formula.

Using the base-currency method: Gross profit = 0.0050 x 100,000 = USD 500.

Using the pip-based method: Gross profit = 50 pips x USD 10 per pip per lot x 1.0 lot = USD 500.

Both methods give the same answer.

Short Trade on a USD-Quoted Pair

Assume the following:

• Pair: GBPUSD
• Direction: Short
• Entry: 1.2700
• Exit: 1.2620
• Lot size: 0.5 lots
• Account currency: USD

Step 1: Calculate the price move. 1.2700 - 1.2620 = 0.0080, or 80 pips in favour of the short position.

Step 2: Apply the formula.

Gross profit = 80 pips x USD 10 per pip per lot x 0.5 lots = USD 400.

Long Trade on a JPY-Quoted Pair

JPY-quoted pairs introduce a currency conversion step for accounts not denominated in JPY.

Assume the following:

• Pair: USDJPY
• Direction: Long
• Entry: 150.00
• Exit: 150.50
• Lot size: 1.0 standard lot
• Account currency: USD

Step 1: Calculate the price move. 150.50 - 150.00 = 0.50, or 50 pips.

Step 2: Calculate the gross profit in JPY. Gross profit (in JPY) = 50 pips x JPY 1,000 per pip per lot x 1.0 lot = JPY 50,000.

Step 3: Convert to USD using the exit rate. JPY 50,000 / 150.50 = USD 332.23.

For accounts denominated in currencies other than USD, the same logic applies but the conversion is to the account currency instead, using the relevant exchange rate against the JPY pip total.

Calculating Net Profit: Spread, Commission, and Swap

Gross profit ignores transaction costs. Net profit deducts the spread, commission where applicable, and any overnight swap charges.

Spread

The spread is the difference between the bid and ask prices, expressed in pips. It is the implicit cost of opening and closing a trade. Spreads at TIOmarkets are variable and are typically higher than minimum figures shown.

Spread cost = Spread in pips x Pip value per lot x Number of lots.

For a 1.1 pip spread on EURUSD at 1.0 lot: Spread cost = 1.1 x USD 10 x 1.0 = USD 11.

The spread is effectively built into the entry and exit prices if you use the actual bid and ask, so it is already reflected in the gross profit calculation. If you are calculating from mid-market prices, deduct the spread cost separately.

Commission

Commission depends on the account type at TIOmarkets:

• Standard account: $0 commission on forex
• Raw account: $6 per round turn lot
• VIP Black account: $0 commission
• Nano account: $6 per round turn lot

The full commission is charged when the position is opened and covers both the open and close of the trade.

For a 1.0 lot trade on the Raw account, the commission is USD 6. For a 0.5 lot trade on the Nano account, the commission is USD 6 x 0.5 = USD 3.

Swap

Swap charges apply to positions held past the daily rollover. At TIOmarkets, swaps are calculated and applied at 22:00 GMT each day. Wednesday rollover typically carries a triple swap to account for the weekend settlement of Saturday and Sunday.

Swap rates are variable and depend on the interest rate differential between the two currencies in the pair. They may be positive (credited to your account) or negative (debited from your account) depending on the direction of the trade and the prevailing rates. Specific swap rates are not published; check inside the platform via the Specification dialog (right-click the symbol in Market Watch > Specification) for current rates.

Putting It Together: Net Profit Calculation

Consider the EURUSD long trade above (1.0 lot, USD 500 gross profit) on the Raw account, held overnight on a non-Wednesday with an illustrative USD 5 negative swap charge.

• Gross profit: USD 500
• Commission: USD 6
• Swap: USD 5
• Net profit: USD 500 - USD 6 - USD 5 = USD 489

If the same trade were on the Standard account (commission-free for forex):

• Gross profit: USD 500
• Commission: USD 0
• Swap: USD 5
• Net profit: USD 500 - USD 5 = USD 495

The illustrative swap figure here is for example only. Actual swap rates vary and must be checked inside the platform.

Using the TIOmarkets Profit Calculator

For quick calculations without manual arithmetic, the Profit Calculator returns the estimated monetary outcome of a trade given the entry price, exit price, lot size, and direction. It accounts for the pip value and currency conversion automatically.

The Pip Value Calculator is useful when you need the pip value per lot in your account currency before running a manual calculation, particularly for cross pairs and JPY pairs.

Using these tools removes the risk of manual conversion errors and ensures consistency between your planning and execution.

Practical Considerations

The gross profit calculation assumes a fixed entry and exit price. Real trades may experience slippage on entry, exit, or both, which can affect the actual realised P&L. Orders are executed at the best available market price, which may result in positive or negative slippage. Demo accounts often execute instantly and may not fully replicate live slippage conditions.

For multi-leg or partial-close trades, calculate profit on each leg separately and sum the results.

For positions held over a weekend, the Wednesday rollover triple swap can materially affect net P&L on longer-term positions, particularly on high-yielding or high-cost pairs.

For trades opened and closed inside the same trading day, no swap charge applies because no rollover is crossed.

Trading at TIOmarkets

TIOmarkets offers MetaTrader 4 and MetaTrader 5 on desktop, web, and mobile, across four account types. The Standard account is created automatically on registration with a minimum deposit of $20 or currency equivalent. The Raw and VIP Black accounts are opened separately through the client area. The Nano account is MT5 only with a $20 minimum deposit, USD only. Hedging is supported on all accounts. A swap-free Islamic account is available; contact TIOmarkets for eligibility and instrument requirements. Copy trading is available on both MT4 and MT5.

Orders are executed at the best available market price, which may result in positive or negative slippage. Demo accounts often execute instantly and may not fully replicate live slippage conditions. Spreads are variable and are typically higher than minimum figures shown. Leverage on each instrument is subject to change depending on market conditions and applicable regulatory requirements. You can review the full list of account types on the TIOmarkets accounts page.