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Forex Calculation Formulas

Forex Calculation Formulas

  • How to calculate margin?

    1) If USD is the base currency (USDCHF, USDJPY, USDCAD):

    Margin = $100 000 x lot size / leverage

    For example, if you open 0.3 lot of USDCHF with the leverage 1:100, the following margin will be required:

    $100 000 x 0.3 / 100 = $300

    The leverage 1:200, Margin = $100 000 x 0.3 / 200 = $150

    However, if you are using the hedging feature (hedging means that you are opening 2 orders of the same currency pair: 1 order to buy and 1 order to sell), then margin is not required for 2 orders.

    For example, if you are opening buy 0.04 lot of USDCHF, you margin will be $40. If afterwards you are opening sell 0.05 lot of USDCHF, your margin will change to $50. All in all margin for these 2 orders will consist only of $50 but not of $90 ($40 + $50).

    2) If USD is the quote currency (EURUSD, GBPUSD) the required margin will be always different.

    Margin= current quote × lot size x $100 000 / leverage

    For example, if you open 0.05 lot of EURUSD with a current quote 1.2706 with the leverage 1:100, the following margin will be required:

    1.2706 x 0.05 x 100 000 / 100 = $63.53

    The leverage 1:200, Margin = 1.2706 x 0.05 x 100 000/200= $31.76

  • How to calculate pip?

    1) If USD is the quote currency, e.g. EURUSD:

    (Units: 1 lot = 100 000, 0.1 lot = 10 000, 0.01 lot= 1000)
     

    1 pip = 0.0001 x units

    2) If USD is the base currency, e.g. USDCHF:

    1 pip = 0.0001 x units/quote

    3) If it is a cross currency pair, e.g. EURGBP:

    1 pip = 0.0001 x units x quote currency quote (GBPUSD)

  • How to calculate equity?

    Equity = Balance + Floating Profit - Floating Loss

  • How to calculate margin level?

    Margin Level = (Equity/Margin) x 100

 


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