Pnl calculation

Beginner Questions
1

in
learn/forex/lots-leverage-and-profit-and-loss

for this example

How the heck do I calculate profit and loss?

  1. Using our formula from before, we now have (.0001/1.4550) x 100,000 = $6.87 per pip x 20 [pips]= $137.40

in point 6 above, i think we should use the 1.4555(best ask) instead of 1.4550 to calculate the profit. as 20 pips is the P&L after closing the position of USD, so the unit of this 20 pips is in Swiss francs. so when converting back to USD, we need to sell Swiss france for USD, which is the rate of buying 1 USD at 1.4555 (best ask). am i correct?

2

You’re correct. To calculate profit and loss accurately, you should use the best ask rate (1.4555 in this case) when converting from Swiss francs to USD. This ensures you account for the price at which you sell the francs to buy USD, reflecting the correct conversion for P&L.

3

thanks a lot! glad that we have the same views. i am new in forex and actively learning. wish you success!