How do I know how much I will earn investing on Forex?

Investments on the OTC Forex market are connected to buying and selling financial instruments in order to make a profit on the difference between the opening and closing prices.

Let us have a look at a simple example (ignoring the spread and/or the commission fee) in order to understand how we make a profit.

Suppose you have decided to buy the EURUSD expecting its price will grow.

The opening price is 1.2291, the trade volume is 1 lot (100,000 units of the base currency).

Making such an operation, you buy the euro for the dollars, specifically 100,000 EUR for 122,910 USD.

Suppose that the price does start to grow and you decide to close the position when the quotations reach 1.2391. The sum of your trade will be 123,910 USD.

Your profit will be the difference between the closing and opening prices: 123,910 USD - 122,910 USD = 1,000 USD.

If the market had gone in the opposite direction (the price started to fall), you would have suffered a loss, its price depending on the closing price of your position.