Analysis of the situation in the financial market requires an error-free calculation. A forex calculator is a class of applications that cope with this task. There is a special program for calculating each of the aspects of trading.
Some traders create special Excel tables and enter all the data there. But it’s inconvenient. After all, there are special online services that allow you to quickly and effortlessly get all the necessary numbers.
They come in a variety of types and are used for various calculations:
- compound interest;
- calculation of the cost of a Forex point;
The specifics for which a Forex calculator is used depends entirely on the specific type. Let’s look at how to use the calculation tools with an example of a risk assessment application.
It determines the potential win and lose based on the current value of the selected currency pair, as well as the set take-profit and stop-loss level. Accordingly, make a deal in such a way that there is a minimum loss and maximum profit.
The risk calculator is the most important, so we chose it as an example. Unfortunately, traders underestimate the role of risk management, so they regularly drain deposits. To avoid this, we developed a special program in which you need to enter the following values.
It is a specific financial instrument that you want to use to make a trade.
This is the currency in which you directly trade.
This is the amount of currency you wish to purchase.
There are two options to choose from: buying and selling.
Levels at which the deal is automatically closed.
After you enter these values, you will see the winnings and profits. The principle is similar for other calculation applications. But the values you need to enter will be different. If we are talking about the cost of a point, you must enter the following values:
- number of points;
- currency pair;
- number of lots;
- deposit currency.
After that, the price of one lot will be determined.
Specifically, in the case of the previous option, which determines the degree of risk on the transaction, the potential profitability and loss, we tried to determine the potential gain and loss on the transaction with the specified data. Of course, you need to take into account that these calculations are approximate. The market will make its adjustments.
As a rule, an experienced trader has no difficulties in understanding the results of calculations. When you use one of the above options, you will already clearly understand what you need and why.
It is certainly an attractive instrument. It will help make the life of a trader much easier. But it should be remembered that this is not a panacea. In addition to this tool, technical and fundamental analysis techniques should be used.