- What Is Profit in Trading?
- Why Use a Trading Profit Calculator?
- How Does Our Trading Profit Calculator Work?
- How to Use a Forex Trading Profit Calculator?
- How to Use a Crypto Trading Profit Calculator?
- Other Essential Trading Calculators
- Key Considerations for New Zealand Traders
Before entering a trade, it's crucial to define your risk level and set realistic profit targets. Our trading profit calculator helps you estimate potential profits or losses instantly, enabling smarter trading decisions.
But how does trading profit and loss work? How is it calculated? Find out in our guide below.
What Is Profit in Trading?
In trading, profit is the gain or loss from a position based on price movements. Whether you buy (long) or sell (short), your profit depends on how the asset’s price changes over time.
How Profit & Loss Work
For a long (buy) position:
Profit = Selling price – Buying price
Loss = Buying price – Selling price
For a short (sell) position:
Profit = Buying price – Selling price
Loss = Selling price – Buying price
How does trading profit and loss work?
- You buy 1 lot of NZD/USD at 0.6000 and later sell at 0.6050 – You made 50 PIPs of profit.
- You short 1 lot of GBP/NZD at 1.9500 and later buy back at 1.9550 – You lost 50 PIPs.
- Your total profit or loss depends on trade size (lot size) and leverage.
Why Use a Trading Profit Calculator?
Most New Zealand trading platforms (such as ASB Securities, ANZ Share Investing, and CMC Markets NZ) automatically display your profit/loss when a position is closed. However, using a profit calculator before entering a trade allows you to:
- Plan trades more effectively by knowing potential profits/losses upfront
- Adjust your risk management strategy based on expected returns
- Compare different trading scenarios before making a decision
A trading profit calculator (also known as a trade return calculator) is particularly useful for Forex and cryptocurrency traders, where market volatility can impact profits quickly.
How Does Our Trading Profit Calculator Work?
Our trading profit and loss calculator helps you determine how much you can gain or lose based on the opening and closing prices of a trade.
To use the trading profit calculator, enter:
- Trading instrument – Forex pair, stock, commodity, or cryptocurrency
- Deposit currency – The currency of your trading account (NZD, USD, EUR, etc.)
- Trade direction – Buy (long) or Sell (short)
- Lot size or investment amount – Position size (e.g., standard, mini, or micro lots)
- Opening price – The price at which the position was opened
- Closing price – The price at which the position is closed (or stop-loss/take-profit level)
Profit Calculation Formula:
Profit = (Lot size × Opening price) − (Lot size × Closing price)
Our calculator provides an instant estimate, but real trading profits may also be affected by:
- Broker commissions
- Overnight swap fees
- Spreads (difference between buy/sell price)
How to Use a Forex Trading Profit Calculator?
For Forex traders, a profit calculator helps determine how much you can earn or lose based on exchange rate movements.
Key Inputs for Forex Profit Calculation:
- Currency pair (e.g., NZD/USD, EUR/NZD, GBP/NZD)
- Account currency (NZD, USD, EUR, etc.)
- Trade size (standard lots, mini lots, or micro lots)
- Opening and closing price
- Trade direction (Buy/Sell)
For example
- You buy 1 standard lot (100,000 units) of NZD/USD at 0.6000.
- Later, you sell at 0.6050, gaining 50 PIPs.
- Profit Calculation: (0.0001 × 100,000) × 50 = $500 NZD profit
If you use leverage, your actual capital invested is lower, but the profit/loss is amplified.
Pro Tip: Always use a Forex profit calculator before placing a trade to ensure your potential reward justifies the risk.
How to Use a Crypto Trading Profit Calculator?
A crypto profit calculator helps traders estimate profits and losses when buying or selling Bitcoin, Ethereum, and other digital assets.
For example
- You buy 1 BTC at $60,000 NZD and later sell at $62,000 NZD.
- Your profit is $2,000 NZD.
- If you use 5x leverage, your profit is multiplied by 5, making it $10,000 NZD.
A crypto profit calculator like ours lets you test different price scenarios before trading.
Other Essential Trading Calculators
Lot Size Calculator
- Helps determine the optimal position size based on account balance and risk tolerance.
- Prevents overleveraging and helps with money management.
Position Size Calculator
- Helps determine how much capital to allocate per trade based on risk management rules.
For example
- You have a $20,000 NZD trading account and want to risk 2% per trade.
- Risk per trade = $400 NZD
- Your lot size should be adjusted accordingly to limit losses.
Pro Tip: Combining a profit calculator with a position size calculator ensures your trades are profitable yet risk-controlled.
Key Considerations for New Zealand Traders
Trading Platforms & Regulations
In New Zealand, Forex and CFD trading is regulated by the Financial Markets Authority (FMA). Ensure your broker is FMA-licensed for security and compliance.
Leverage Limits
New Zealand traders have higher leverage options compared to some other countries. However, use caution as leverage can amplify both gains and losses.
Tax Implications
In New Zealand, trading profits may be subject to income tax if you are classified as a trader by Inland Revenue (IRD). Keep track of your trades for tax reporting purposes.
Market Hours
- Forex trading operates 24/5, but stock and crypto markets follow specific hours.
- Be aware of New Zealand Stock Exchange (NZX) trading hours and global time zone differences.
Whether you trade Forex, stocks, or crypto, knowing how much you can earn (or lose) per trade is essential for long-term success.
Get started with our free Trading Profit Calculator today and take control of your trades with confidence!
