MT4 Profit/Loss Calculation

Beginner Questions
1

Help required with MT4 profit/loss…

Recently started using MT4 live account, base currency as I am aware is GBP but trading on what seems to be a US server.

Taking advice from various sites my P/L calculation would be no. of PIPS (x) lot size… exp below…

EUR/USD - Buy @ 1.23265 - close @ 1.23038 (227 PIP loss if thats correct?) (x) lot size 0.03 which should equate to a loss of 6.81.

When I check my MT4 history my loss on that trade was -4.83 and perhaps I am being a tad stupid but can’t understand why, is it something to do with how the MT4 account is setup?

Any advice much appreciated

Bobs689

2

No it’s to do with the fact that only the first 4 decimals constitute teh “Pips” - the fifth decimal is the “Point” - so you only lost 22.7 Pips ! :relaxed:

3

Thanks for correcting me, so how would the calculation rework itself as it still doesn’t make sense in my head…

If I rework it and say my loss was -22.7 PIPS * 0.03 lot size that’s a revised figure of 0.69… not 4.83?

Thanks,

Bobs689

4

1 lot =$10 per pip
0.1 lot = $1 / pip
0.01 = 10 cents per pip.
0.03 = 30 cents per pip
22.7 x 0.3 = $6.81

So $6.81 - Now you are the one with the statement sitting in front of you - how that $6.81 becomes whatever you said, should be itemised on the statement.

$4.83 = 16.1 pips ?

5

Thanks for explaining…

Nothing is itemised, on my history in MT4 it just shows

EUR/USD, buy 0.03 -4.83
S/L: 1.22900
TP: 1.24145
No swap/taxes/charges

I could be way off base here but is it a happy coincidence that 6.81/4.83 = 1.41 which is the current exchange between GBP/USD, I just question whether this has something to do with the account set up, base currency being GBP but perhaps the fact my P/L is being calculated in USD?

1 Like
6

So wait a minute - are you quoting yor loss in £ ? -

Yes all calcs are done in $ !

lol I just "think in $ " when trading !

1 Like
7

When you are trading eurusd the base currency is usd so all the math is done in usd. So if your account balance in gbp it will be converted to gbp.
But when you are taking eurGBP the base currency is GBP. So all the math is done in gbp

8

It’s the other way round.

When you’re trading EUR/GBP, the base currency is the Euro. GBP is called the “quote currency”.

The “base currency” is always the first one.

1 Like
9

Yes, you are right. I am sorry

10

So the quote currency, is the one that will be use in all calculation?