Although it is considered the largest financial market across the globe, the forex market can be challenging due to its volatility. Investors and forex traders must, therefore, approach the currency market with caution.
Establishing how much money is worth your investment should be the first step when investing in the forex market. This is where forex calculators come in handy.
A forex calculator is an essential tool that enables traders to manage risks encountered in the forex market. This article highlights 15 types of forex calculators that you would never want to miss. Read on for a detailed description of these calculators.
1. Forex Pip Calculator
A forex pip calculator is used to calculate the pip value of your base currency. These calculations enable you to assess your risk per trade accurately. Pip value is defined as the value change experienced in every currency pair due to a movement in each pip within specified exchange rates.
For you to use a pip calculator, you will need your position size, your trade’s currency pairs, and the base currency. Here is how a pip calculator works;
- Set the pip size or amount on the pip calculator. Other than currency pairs that contain the Japanese Yen, one pip size is equivalent to 0.0001 of the price.
- Choose the exchange rate from the available rates in the pip calculator.
- Select the currency pair for the trade.
- The pip calculator determines the pip value for a particular position size.
- Convert the pip value into the currency of your choice as per the selected exchange rate.
A pip calculator can generate the pip value in different types of accounts based on the size of the trade, including micro, mini, and standard accounts. You will probably need a pip calculator to draw a line between investing for fun and investing for profits.
2. Fibonacci Calculator
Forex market is often faced by rebounds and breakdowns. To establish the points of the price graph where these scenarios happen, Fibonacci retracement levels are used. Each level is a percentage of how much of the prior move has been retracted by the preceding movement.
The Fibonacci forex calculators are used to calculate the Fibonacci retracements and extensions. All you need is the highest and lowest values of the current trend and its direction. Once fed with these data, Fibonacci forex calculators will generate the arbitrary terms of the sequence. You do not have to run the calculations manually any longer.
3. Forex Margin Calculator
A margin calculator is used to calculate the margin required to hold or open positions. Opening a position with your account requires you to establish a margin that must be maintained in that account. A position is a currency, commodity, or security owned by a trader, allowing them to have access to their currency movement against other currencies.
With a margin calculator, therefore, an investor can determine whether to adjust their leverage or minimise the lot size being traded. Using a margin calculator takes into account trade size, currency pair to be traded, account currency, and the trader’s leverage. Select these details and have the margin calculator do the rest of the job for you.
4. Position Size Calculator
In forex trading, you must always invest or trade with an amount of money that you are ready to lose. This is because forex trading revolves around taking risks. However, if you are to be successful in this business, you must be smart about how you manage these risks.
This is why proper position sizing is fundamental to ensuring that you do not have your account blow up on a single trade. This is where position size forex calculators come in.
A position size calculator is used to establish the appropriate size of a position to be traded based on stop loss in pips, risk level, account size, and currency pair. While a margin calculator determines the margin of a position, the position size calculator focuses on the size of a position.
With a few basic inputs on the position size forex calculators, you can determine how much currency is worth buying or selling to keep the maximum risk per position under control.
5. Forex Stop Loss Calculator
This is also referred to as a Stop Loss Take Profit forex calculator. ‘Loss Stopping’ and ‘Profit Taking’ are known to be the most fundamental elements of managing forex trade.
What this means is that, through this calculator, traders can instruct their brokers to limit losses and leverage profits on a particular position. Stop Loss forex calculators are used to establish potential profit or loss associated with a specific trade.
The Stop Loss calculator enables you to sit back and make wise decisions on the best trade for an investment.
Whether you intend to put your currencies on a long-term or short-term trade, Stop Loss forex calculators can evaluate all the associated gains or losses. All you need is your position size, the base currency of your trading account, and your trading instrument.
6. Forex Lot Size Calculator
A lot size calculator is one of the few types of forex calculators that can help you manage risks accurately, efficiently, and fast. The lot size calculator is used to calculate the size of a unit position and lots suitable for trade. A lot is defined as the number of units of an account currency or base currency that you intend to sell or buy.
A standard lot is equivalent to up to 100,000 units of your account currency. This means that if you intend to invest one lot in EURO/USD, then you must have up to 100,000 USD.
A Lot size calculator will help you get this calculation right. In addition to calculating the unit size of a position for a specific trade, a lot size calculator comes with the following benefits;
- A lot size calculator makes trading quicker and efficient.
- With a lot size calculator, you can establish potential trade entries.
- A lot size calculator is the easiest means to find suitable profit targets and potential stop-loss levels.
- A lot size calculator helps in calculating potential risk-reward ratios.
- If you want to determine how large a trade is, a lot size calculator would be a great indicator.
7. Forex Profit Loss Calculator
Profit and loss forex calculators are used to determine how much a trader is likely to gain or lose once their ‘Take-Profit’ and ‘Stop-Loss’ levels have been achieved. To calculate this anticipated profit or gain using profit and loss forex calculators, you will need your lots size, account types, currency pair, take profit value, and the stop loss value.
It is easy to calculate the profit and loss of an intended trade manually if US dollar terms are used to quote a pair of currency. The calculations, however, can become complex when other foreign currency pairs are used. This is why profit and loss of forex calculators are essential.
8. Forex Pivot Point Calculator
In forex trading, a pivot point is referred to as an indicator used by professional market makers and forex traders to determine points around which the market could shift. This shift is in reference to resistance levels and potential support areas where the change in price movements can be experienced.
Pivot point forex calculators are used to calculate these pivot points.
These forex calculators are used to establish pivot points for any financially-traded instrument such as stocks, bonds, options, commodities, and futures.
These instruments must, however, have a close, high, or low price within any given span. Pivot points are quite essential in determining the direction a trade is likely to take on a daily, weekly, or even monthly basis.
9. Forex Swaps Calculator
A swaps calculator is used to calculate a rate known as the forex swap or swap fee. This is the interest rate charged on your account for leaving any position open overnight. A swaps calculator arrives at this rate based on whether a position is short or long.
The swap rate calculated by the swaps calculator is a variance between the two currencies of the trading currency pair. The fee is either debited or credited to your trades once the position has been rolled over, with the rate reflecting in your account balance.
To use a swaps calculator, you will need the trade size, account currency, account type, and the instrument you are trading.
Once you input these details, the swaps calculator will generate your forex swap. In most cases, a swaps calculator will be updated every day to ensure that you get a reflection of how much interest is to be charged.
You might not need to use a swaps calculator if your trading business runs intraday. A swaps calculator will only become a fundamental tool for you if you hold a position more than required.
10. Forex Spreads Calculator
A forex spreads calculator is used to calculate spreads for a forex market. Just like any other market, the forex market has spread too.
By definition, the spread is the difference between the buying and selling price of a currency pair. Brokers in forex use two common types of spreads, including bid and ask. A bid is the selling price of the base currency, while ask represents the selling price of that currency.
A forex spreads calculator is an essential tool for forex brokers as they enable them to establish how they can make money with ‘no commission.’ Instead of separately charging a trade with ‘no commission,’ the cost is surcharged from the selling and buying price of a currency pair to be traded.
However, when using a forex spreads calculator, it is critical to note the following;
- A spread may vary throughout the day, ranging from a low to a high spread. This is caused by various factors, including liquidity and volatility. A forex spreads calculator takes this variance into account.
- Spreads are subject to marginal calls. This means that when a spread widens while holding a position, you may get a margin call or be stopped out of that position. You can use a forex spreads calculator to monitor the movement of prices to avoid the widening of spreads.
- Spreads forex calculators use pips, which is the measuring unit of a spread.
11. Forex Profit Calculator
It is not sufficient to trade or invest in the forex market without anticipating the downside liability and the positive impact of having an open position. While that is the case, most traders will use Profit and Loss forex calculators as their risk management tools.
However, every forex trader is in for the business to make a profit. As far as having a clear picture of the financial benefits of trade is concerned, a profit calculator comes in handy to combine all the relevant factors to indicate possible profits.
Here is a guideline of factors used by a profit calculator in calculating anticipated benefits:
- Currency Pair. A profit calculator avails a wide range of pairs, including exotics, minors, majors, and crosses.
- Action. This is where a profit calculator designates whether the position is held by a sell or buy command and whether it is long or short.
- Account Currency. The profit calculator must establish what currency is preferred in a particular trading account.
- Trade Size. These are allotments used by a profit calculator to establish the pip value of a particular trade.
- Opening Trade Price. This is the price through which a trader achieves market entry when a new position is opened.
- Closing Trade Price. A profit calculator also establishes the price through which a trader achieves market exit when a position is closed.
12. All-in-one Forex Calculators
All-in-one forex calculators act as consolidation of a margin calculator, pip calculator, swaps calculator, and a lot size calculator.
What this means is that you can calculate swaps, pip value, leverage, and the position size of a trade using one platform (all-in-one forex calculators). The current market price is used to make these calculations, and the results are converted to your preferred currency.
All you need is to input details related to margin, swaps, position size, and pip value, and the calculator will run the calculation for you. Such details include the account base currency, trade type, type of trading instrument, and the trade size.
13. Multitarget Calculator
Forex traders are interested in a trade with the best Return to Risk Ratio (RRR). Multitarget forex calculators are used to establish the portion or size of a position that should be closed at multitarget levels to achieve the best RRR.
If a trader predicts that a market movement is likely to yield a long-term trend, then they might want to apportion a larger part of the trade to the final target. However, if the anticipated movement is likely to yield little returns, multitarget forex calculators allow traders to emphasise the initial targets for the trade.
14. Risk Percentage Calculator
Risk percentage forex calculators are used to specify the percentage of the account balance that a trader is willing to risk. This makes it easy for forex traders to apportion the appropriate lot sizes to a specific trade.
Risk percentage forex calculators take into account the currency pair, account currency, and the stop-loss price. The result of a risk percentage calculation is the trader’s stop loss in pips and their lot size.
15. Risk and Reward Calculator
Risk and Reward Forex Calculators are used to calculate the best targets of a position, and the reward-to-risk ratios linked to these targets. These calculations are usually based on the Fibonacci retracements from the bottom to the local peak or vice versa.
This is one of the most critical forex calculators that a trader should have as it enables them to know the potential risks of a trade before opening a position.
A Summary on Forex Calculators
Forex calculators are fundamental tools for any forex trader or investor.
Check this video on our YouTube channel, we cover more in-depth other tools you need to learn about.
These calculators are used for diverse purposes in efforts to manage risks associated with the forex market. Here are some important points to remember:
- A pip calculator is used to establish the pip value of your base currency. The currency against which a country’s exchange rates are quoted is known as the base currency.
- The pip value established by a pip calculator is for specific position size.
- A pip calculator uses various dimensions, including the exchange rate, currency pair, and the pip size.
- Based on the trade size, a pip calculator can be used to generate the pip value for multiple account types.
- A lot size calculator is used to calculate the unit size of a position and lots that best suit a trade.
- A Fibonacci calculator is used to determine Fibonacci retracements.
- A margin calculator determines the margin needed to hold a position.
- A margin calculator enables traders to make decisions on whether to minimise their lot size or adjust their leverage.
- A position size calculator is used to analyse the size of a position to be traded.
- A margin calculator requires an input of such factors as the account currency, trade size, leverage, and currency pair.
- A stop-loss calculator determines the loss and gains associated with a trade.
- The lot size forex calculator is used to calculate the unit size of a position and lots fit for a trade.
- The profit loss calculator determines the gains and losses linked to a trade.
- Pivot point calculators determine the pivot points of a financially-traded instrument.
- A swaps forex calculator calculates the forex fee or rate.
- A forex spreads calculator calculates spreads in a forex market.
- By getting the difference between the buying and selling prices of a currency pair, a forex spreads calculator determines how forex traders earn from a ‘no commission’ trade.
- A profit forex calculator measures the financial benefits of a trade.
- An all-in-one forex calculator determines the pip value, swaps, leverage, and position size of a trade at a go.