# Determine the number of points

When you trade currencies you will buy the currency at a price and sell it at another price.

As we mentioned that the exchange rate fluctuated in fixed percentages, the greater the difference between the selling price and the purchase price means that you sold at a higher price several points above the purchase price.

The difference between the selling price and the purchase price is the size of your loss or profit.

How can you know the difference between the selling price and the purchase price? And whether this difference profit or loss?

You can do this with the following three equations for each type of currency:

To determine the difference of points for the euro and the pound

By the following formula you can know the difference between the selling and buying rates of the Euro and the British Pound.

Points difference = (selling price – purchase price) * 10000

If the reference is positive, the difference is profitable, and if the reference is negative, the difference is a loss.

Example 1

Suppose you bought the euro at EUR / USD = .9850

And his price at EUR / USD = .9890

How much difference between selling and buying? Is it profit or loss?

Answer:

Points difference = (selling price – purchase price) * 10000

= (9890. – 9850.) * 10000 = 40

That is, you sold a 40-point profit. (Reference to the positive).

Example 2

Let’s say you sold the pound at GBP / USD = 1.5289

Then I bought it at GBP / USD = 1.5320

How much difference between selling and buying? Is it profit or loss?

Answer:

Points difference = (selling price – purchase price) * 10000

= (1.5289 – 1.5320) * 10000 = -37

That is, you ended the deal with a loss of 37 points. (Negative sign).

To determine the difference of points for the Swiss franc

With the following formula you can see the difference between the selling and buying prices of the Swiss franc only.

Difference Points = ((Selling Price – Purchase Price) * 10000) * -1

If the reference is positive, the difference is a gain, although the negative difference is a loss.

Example 1

Let’s say you bought the franc at USD / CHF = 1.4827

Then sold it at USD / CHF = 1.4785

How many points difference? Is it profit or loss?

Answer:

Difference Points = ((Selling Price – Purchase Price) * 10000) * -1

= ((1.4785 – 1.4827) * 10000) * -1 = 42

That is, you ended the deal with a gain of 42 points. (Reference to the positive).

Example 2

Let’s say you sold the franc at USD / CHF = 1.3267

Then I bought it at USD / CHF = 1.3102

How many points difference? Is it profit or loss?

Answer:

Difference Points = ((Selling Price – Purchase Price) * 10000) * -1

= ((1.3267 – 1.3102) * 10000) * -1 = -165

That is, you ended the deal losing 165 points. (Negative sign).

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