Trader's Calculator

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The trader’s calculator is a special function built in the xStation trading platform in the order window. In this article, you will learn how XTB’s trader’s calculator works and how you can use it to make your trading process more efficient.

What Is XTB’s Trader’s Calculator?

  • The trader’s calculator is a special function built in the xStation trading platform in the order window.
  • It helps in the automatic calculation of the parameters of your trade, such as pip value, margin, spread value and much more.
  • It instantly determines all aspects of your trade, allowing you to make more informed trading decisions at a quicker rate.
  • The trader’s calculator is a great tool that can help you in risk management.

Why Use the Trader’s Calculator?

One of the keys to successful and profitable trading is risk management. In order to analyse your risk for each trade, it’s important to understand how much you can potentially profit - or lose - with each position.

With our advanced in-built trading calculator, aspects like pip value, margin, spread value, and potential profit or loss levels are instantly determined, so that you can make more informed trading decisions - without having to do any manual mathematics.

How Does the Trader’s Calculator Work?

xStation Traders Calculator

Source: xStation

Let’s take a look at the example above, where an order window has been opened on EURUSD and a 1 lot volume buy order has been selected.

When a 1 lot transaction is opened, the trader’s calculator made some helpful calculations that include:

  • Spread: £8.31
  • Margin: £417.78
  • Pip value: £7.56

So, with the trader’s calculator, you know that the spread cost of placing the trade is £8.31. You also know that £417.78 of your capital will be reserved as margin for the duration of the trade. Also, you know that you stand to profit or lose £7.56 with every pip movement in the market above or below your opening price.

Let’s say that the market moves 50 pips in your favour:

Profit = (Number of pips x Pip value) - Spread =  (50 x 7.56) - 8.31 = £369.69

Let’s say that the market moves 50 pips against you:

Profit = (Number of pips x Pip value) - Spread = (-50 x 7.56) - 8.31 = -£386.31

FAQ

A pip stands for ‘percentage in points’ and represents the smallest price change that a market can make.

The pip size changes across most markets. For example, most currencies are priced to four decimal places, meaning that a 0.0001 move in the market is referred to as a 1 pip move. However, 1 pip in the USD/JPY is the equivalent to a move in price of 0.01.

You can determine how much you gain or lose per pip using lot size to set the volume of your trade. When traders refer to the movement of a particular market, they talk of its movement in pips. For example, the GBP/USD rallied 150 pips today.

Lots in trading represent the number of units of a financial instrument bought on an exchange. Typically, the number of units is conveyed by the lot name. For example, in the stock market, a round lot is 100 shares. However, investors do not have to buy round lots, as a lot can be any number of shares.

The spread on the financial markets is the difference between the buy (ask) price of an instrument and the sell (bid) price of an instrument. When placing a trade on the market, the spread is also the main cost of the position. The tighter the spread, the lower the cost of trading. The wider the spread, the higher the cost. You can also view the spread as the minimum distance the market has to move in your favour before you could start earning a profit.

In trading, the margin is the money borrowed from a broker to purchase an investment. It is the difference between the total value of an investment and the loan amount.

The trading calculator does not give you an objective measure of risk, but it can calculate a number of data points that will let you know what your risk in each trade is. You can, for example, use the trading calculator to determine your position sizing and your risk/reward ratio for any trade. Both are very helpful in determining how much risk you are taking on with a specific trade. You can also calculate the value of each pip in your trade, which lets you know of your potential profits and losses.

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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