Currency trading is a business of numbers, and as such, a lot of computations take place in the process. These are not ordinary arithmetic (although that is necessary); most of the calculations are done in specific ways with certain values. To make it easier on traders, a lot of forex trading tools have been developed, one of which is the forex calculator. This tool helps in the process of carrying out currency trade activities aimed at increasing the chances of profits.
There are different types of forex calculators designed to meet different needs. Some of them are all in one, pip value, swap, margin and, profit and loss calculators.
ALL IN ONE CALCULATOR:
This trading tool can be used to compute the margin, pip value, leverage size, and swap. Just like the name implies, it can perform a lot of functions, and can help save the cost of purchasing specific calculator for each task.
PIP VALUE CALCULATOR:
This is for working out the pip value of different account types based on one’s trade size. This has to do with the amount of change in the exchange rate of a currency pair; a very necessary process in every forex transaction.
Day traders make use of this a lot. It is for working out the roll over interest rate that is credited or debited from a trade’s account when a position is held open over night. It can happen that a trade opened today can extend for over 24 hours in order to meet up with a certain speculation. In such cases, the swap needs to be calculated to find the differential between the currency pair and either add or deduct it from the trader’s account.
Margin is one really good thing that can help investors trade beneficially in forex if applied correctly. It is a good fate deposit made by a trader as collateral to hold open a position greater than the deposit made. It depends on a number of things like the size of the deposit, the account currency, leverage, and the currency pair being traded. Putting all this into consideration, one can easily calculate the required margin for his or her position.
PROFIT AND LOSS CALCULATOR:
This shows how much one stands to gain or lose at the point of stop-loss or take profit. Since things are not painted in black and white in the forex industry, it will help to have an idea of what might happen when you decide to close a position and take profits.
These are some of the calculators used in trading the forex market. When used cautiously, they can help develop one’s career as a currency exchange investor.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.