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# How to calculate percentage return on forex?

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Forex trading, also known as foreign exchange trading, is the buying and selling of currencies with the goal of making a profit. As with any investment, it is important to calculate your percentage return in order to evaluate the success of your trades. This article will explain how to calculate percentage return on forex.

### Step 1: Determine your initial investment

Before you can calculate your percentage return, you need to determine your initial investment. This is the amount of money you used to buy or sell a currency pair. For example, if you buy 10,000 euros at a rate of 1.20 USD/EUR, your initial investment would be \$12,000.

### Step 2: Determine your final investment

Your final investment is the amount of money you have at the end of your trade. This includes any profits and losses. For example, if you sell your 10,000 euros at a rate of 1.25 USD/EUR, your final investment would be \$12,500.

### Step 3: Calculate your profit or loss

To calculate your profit or loss, you need to subtract your initial investment from your final investment. In our example, the profit would be \$500.

### \$12,500 – \$12,000 = \$500

If your final investment is less than your initial investment, you would have a loss instead of a profit.

### Step 4: Calculate your percentage return

Now that you know your profit or loss, you can calculate your percentage return. This is the percentage increase or decrease in your investment. To calculate your percentage return, you need to divide your profit or loss by your initial investment and multiply by 100.

### Percentage Return = (\$500 / \$12,000) x 100 = 4.17%

This means that your investment increased by 4.17%. If your percentage return is negative, it means that you lost money on your investment.

### Why is calculating percentage return important in forex trading?

Calculating percentage return is important because it allows you to evaluate the success of your trades. By knowing your percentage return, you can determine whether you are making a profit or a loss. This information can help you make better trading decisions in the future.