Hello, this question is a sanity check to make sure I am understanding how to figure out my profit/loss on a long or short. Is my understanding of how this works correct in these made up examples?
Example 1 from EUR/USD prices.
At time of initial order:
BID: 1.189470 ASK: 1.189540
At time of exit order:
BID: 1.191010 ASK: 1.191130
If I long, then my profit/loss is = ExitBID - InitialASK
In this example, 1.191010 - 1.189540 = 0.00147. A gain of 14.7 pips.
If I short, then my profit/loss is = InitialBID - ExitASK
In this example, 1.189470 - 1.191130 = -0.00166. A loss of 16.6 pips.
Example 2, from USD/JPY prices.
At time of initial order:
BID: 110.4330 ASK: 110.4650
At time of exit order:
BID: 110.6600 ASK: 110.6690
If I long, then my profit/loss is = ExitBID - InitialASK
In this example, 110.6600 - 110.4650 = 0.195. A gain of 19.5 pips.
If I short, then my profit/loss is = InitialBID - ExitASK
In this example, 110.4330 - 110.6690 = -0.236. A loss of 23.6 pips.
Is this is how it works? Thanks.