All lessons
Calculate profit and loss
A winning price move is only the start of the arithmetic. Account currency and costs still need their turn.
Calculate a simple position's result and convert it into account currency.
For a long position, gross profit or loss equals base quantity multiplied by exit price minus entry price. For a short position, reverse that price difference. With an ordinary currency quote, the first result is in quote currency.
Use executable entry and exit prices consistently. If those prices already include crossing the spread, do not subtract the spread a second time. Deduct commissions, financing and other applicable charges separately to find the net result.
If the account uses another currency, conversion adds another step and sometimes another fee. Record the conversion rate and its direction. Unrealised profit describes an open position at a valuation price; it may differ from what closing actually produces.
Let’s use numbers · hypothetical example
Buy EUR 5,000 at 1.0900 and sell at 1.0940: gross gain is USD 20. After USD 3 fees, net gain is USD 17. At an illustrative USD/LKR 300, that equals LKR 5,100 before conversion charges.
Keep in mind
These formulas assume a linear contract quoted this way. Inverse or other derivative contracts can have different calculations.
Your turn
Calculate the result if the exit is 1.0860 with the same quantity and USD 3 fees. Label every currency.
A quick check before we move on
Where is EUR/USD P&L initially calculated?
- Sri Lankan rupees regardless of account
- US dollars, the quote currency
- Euros in every account
Check answer
US dollars, the quote currency Quantity in euros multiplied by dollars per euro produces dollars. Account conversion follows if required.
Sources and further reading
Content reviewed: 29 October 2026
Educational material with hypothetical examples. Trading can cause substantial losses. A course, pattern, stop order or past result cannot guarantee a profit or limit every loss. Practise in simulation and check current rules and product terms in your jurisdiction.
