From Oanda:
fxtrade.oanda.ca/analysis/profit-calculator/how
Example 2:
You see that the rate for USD/JPY is 115.00/05 and decide to buy 10,000 USD. Your trade is executed at 115.05.
10,000 USD115.05= 1,150,500 JPY
You bought 10,000 USD and sold 1,150,500 JPY.
The market rate of USD/JPY falls to 114.45/50. You decide to sell back 10,000 USD at 114.45.
10,000 USD114.45=1,144,500 JPY
You bought 10,000 USD for 1,150,500 JPY and sold 10,000 USD back for 1,144,500 JPY. The difference is your loss and is calculated as follows: 1,150,500-1,144,500= 6,000 JPY. Note that your loss is in JPY and must be converted back to dollars.
To calculate this amount in USD:
6,000 JPY/ 114.45 = $52.42 USD or
6,000 *1/114.45=$52.42
Question … why is it 6000 / 114.45 and not 6000/114.50??? Aren’t I trying to buy USD and sell the JPY profit I have? Shouldn’t I be using the market sale/ask price of the pair rather than the bid price?