P/L Calculations in Forex

Hello Matthew

could you explain quickly how p/l is calculated involving the cash Forex markets, please? I tried to find this info on the site but I have not found it. I tried to reconstruct calculations from posted system trades but have not arrived at the posted results, probably because I’m inept mathematically…

As an example say we short “10 BAR Japs Yen” (I note in your trade listings cash Forex always start with BAR…) at 111.00 and cover the short at 110.00.

What are the lot sizes in Forex?

Thanks for providing this most intriguing website!


Hi, Thomas:

Let me explain how the P/L calcs work for Forex. Forgive me for answering in generalities and not using actual numbers in this example; if you want me to do the calcs, let me know and I can send you a private email.

The main thing to note is that all P/L results need to be quoted in the same currency, US Dollars, so that the results of various trading systems – both Forex systems and non-Forex systems - can be compared. So the way P/L calcs work is as follows. First, the software calculates the profit or loss in the denominator currency. This is the currency used to purchase the rubles or krona or whatever that actually gets moved into your account.

Once we know the P/L in terms of denominator currency, we can convert that P/L into U.S. Dollars (assuming the denominator is not already US Dollars).

In theory, if you do all the math, the results should match what Collective2 shows. If it doesn’t, then by all means let me know!

Finally, to answer your (easier) question: lot size on Collective2 is 10,000.

Let me know if you have any other questions about the site.

Best regards,