Calculating profits from Forex trading

Many beginning traders are interested in the question "How to correctly calculate the profit received," because, as we know, money loves an account.

The obtained data can be used to analyze trading performance statistics.

When making calculations, you need to take into account many different nuances that play an important role, and to get a net result, it is advisable to subtract all overhead costs that are present in your work from the amount received.

To carry out calculations, you should use data such as the total amount of funds deposited, profit from successful transactions and losses incurred from trading, as well as interest accrued on available funds in the trader's account.

For greater objectivity, one should also not forget about the additional costs that will be mandatory - payment for the Internet, a virtual server, the purchase of advisors or auxiliary scripts.

1. First of all, we calculate our financial result for the operations carried out.

Pr – Ub = Fr where Pr is profit, Ub is loss.

For example, during one month, 2750 profit was received from successful transactions and 1330 losses from losing trades, which means that the result is 2750 – 1330 = 1420 US dollars.

Some platforms offer the ability to obtain ready-made data on financial results, i.e., the amount of profit taking into account losses for a specified period.

Then we subtract, so to speak, operating expenses - 1420 - 10 (Internet) - 10 (virtual server) = 1400 dollars

2. Add the forex interest our broker charged us to the resulting amount, for example, $30. The result is $1,400 + $30 = $1,430.

The next step is to compare how profitable our work was, taking into account alternative investment options. After all, the money could have been invested elsewhere and still generated a stable income, so our profit calculation would be incomplete without taking this into account. Let's assume our capital is $10,000.

Profit from alternative investments

1. A standard bank deposit – the average interest rate on dollar deposits doesn't exceed 9% per annum or 0.75% per month. Multiplying our investment amount, $10,000, by 0.75% yields only $75 per month. This is significantly less than trading on the forex market independently.

2. Investment fund – in this case, investment returns reach up to 45% per annum or 3.75% per month, which, with our capital, is about $375 per month. This is better, but still less than what we earned on our own.

3. PAMM accounts are another source of passive income; the rates here are much higher than the two previous options, ranging from 10 to 50 percent monthly.

If you take a PAMM account with an average return of 25%, and therefore low risk, you can expect a profit of $2,500. This is significantly higher than our independent trading, in our case.

It's important to remember that the risks of investing in PAMMs are enormous, and you could not only fail to make a profit, but also lose your entire deposit.

4. Alternative strategies – using, so to speak, sure-fire strategies – http://time-forex.com/strategy/bezproiryshnye-strategii will also allow you to earn a stable profit of around 10% per month. Moreover, the risk is much lower than with PAMM accounts.

All comparisons are quite relative, since in the initial stages of stock trading it is quite difficult to make any profit, and you shouldn't count on even 5% per month.