Bex500 Forex profit-loss calculation

◆ What is Bex500 Forex?

Forex Contracts are quoted by Forex pairs, such as EUR/USD, USD/JPY

the left of “/”is “Base Currency”, the right of “/”is called “Quote Currency”

For example, USD/JPY=106.906 means:

1USD=106.906JPY, USD is the base currency, JPY (YEN) is the quote currency. The currency pairs can tell you how much Quote Currency can buy the Base Currency.

【For Example】When you are buying a forex position using “Base Currency / Quote Currency” terminology, you are actually buying Base Currency. When you are selling the position of “Base Currency / Quote Currency”, you are actually selling the Base Currency. Let’s cite “USD/JPY as an example”

1. The long USD/JPY (you think USD will appreciate relative to JPY ). This means you are buying the base currency (USD) and selling the quote currency (JPY)

2. On the contrary, a short USD/JPY means you are selling the base currency (USD) and simultaneously buying the quote currency (JPY).

◆ How to trade if you predict the base currency will appreciate relative to quote currency?

【For Example】A trader, who received good news about NFP, predicts the USD/JPY exchange rate will increase. He believed that he will need more JPY to exchange USD in the near future. He decided to trade using the following process:

He predicted that the current USD/JPY price=105.141 will rise soon.

He bought many USD/JPY contracts, with the value of the contracts being \$100,000. With 200x leverage, trader A only needs to input 500USD as the margin.

After the USD/JPY price rises up to 106.906, Trader A closed the order.

Profit calculation:

Because all profit is settled by USDT or BTC, Trader A’s profit will eventually go to his settlement account currency at the current exchange rate.

◆ How to trade if you predict the base currency will depreciate relative to the quote currency?

【For Example】A trader realized the rise of unemployment rate can result in depreciation of USD. He believed that he will need less JPY to exchange USD. He decided to trade as follows:

He predicted that the current USD/JPY price=106.906 will depreciate.

He sold many USD/JPY contracts, with the value of contracts being \$100,000. With 200x leverage, trader A only needs to input 500USD as the margin.

After the USD/JPY price depreciates to 105.141, Trader A closed the order.

Because all profit is settled by USDT or BTC, Trader A’s profit will eventually exchange to his settlement account currency by the current exchange rate.

◆ What is Rollover Interest Rate?

As previously mentioned, when you are buying a position using “Base Currency / Quote Currency” contract, you are actually buying the Base Currency.

Thus, you will get the “Base Currency” interest and need to pay the “Quote Currency” interest.

If earned interest>paid interest, the currency interest is positive.

If earned interest<paid interest, the currency interest is negative.

For example, if you buy a USD/JPY contract at this time, according to the current interest rate, you can get 0.0021% daily interest.

For example, if you sell a USD/JPY contract at this time, according to the current interest rate, you need to pay 0.0119% daily interest.

In fact, the forex trading pair is common and useful in many different areas. For example, the BTC/USD trading pair is the typical forex trading pair, with BTC as Base Currency and USD as the Quote Currency.

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