The Profit and Loss Formula (with a Worked Example)
Pips = (exit price - entry price) / pip size x direction (+1 buy, -1 sell)
Gross P/L = pips x pip value per lot x lots
Net P/L = gross P/L - costs
Worked example: a 0.5 lot EURUSD long from 1.0800 to 1.0850 captures 50 pips. At 10 per pip per standard lot, the gross is 50 x 10 x 0.5 = 250.00. A short from 1.0850 down to 1.0800 captures the same 50 pips and the same 250.00, because the direction flips the sign.
Pips Captured vs Money Made
Pips measure the move; money measures the outcome. The same 50 pip move is worth very different amounts depending on your lot size and the pair, which is why this tool always shows both. For a standard lot, a pip on most USD-quoted pairs is 10, but on a JPY pair the pip value depends on the exchange rate, so the calculator converts it for you using the exit price.
Leverage does not change the pip math. A 50 pip win is 50 pips whether your account is 1:30 or 1:500. What leverage changes is the margin the position ties up, and therefore your return on margin, which the calculator shows as a separate row. Confusing pips with money, or thinking higher leverage earns more per pip, is one of the most common beginner mistakes.
CFD and Index Profit: What Changes
On index and commodity CFDs you count points rather than pips, and the contract size differs from forex. A standard lot of an index like US30 is often one unit per point, so a 100 point move is 100 per lot. Gold is quoted in dollars per ounce with 100 ounces per lot, so a one dollar move is 100 per lot. The calculator reads the contract size from the instrument you pick, so the points-to-money step is handled for you.
Crypto CFDs work the same way, with one lot usually equal to one coin and fractional sizes allowed. Because these instruments move in larger nominal ranges than forex, always confirm the contract specification in your platform, then let the tool convert the move into your account currency.
Counting Costs: Spread, Commission, and Swap
The gross figure is the move alone; the net is what actually lands in your account. Spread is baked into your entry and exit, commission is charged per lot on many accounts, and swap is the overnight financing on positions held past the daily rollover. Enter your total costs in the costs panel and the calculator subtracts them to show the net.
On small or short-term trades, costs can be the difference between a winner and a loser. A trade that looks profitable in pips can be flat or negative once spread and commission come out, which is why the tool flags when costs flip a winning move into a net loss. Track your real costs so your expectancy math is honest.
