How do I calculate the foreign exchange?
It is recommended to use the multiplier or divisor method when calculating foreign exchange. To calculate foreign exchange with the multiplier method, use the formula:
Foreign Amount x Exchange Rate = Amount in Home Currency, and with the divisor method, use the formula:
Foreign Amount / Exchange Rate = Amount in Home Currency. For more complex calculations, it is best to use a program such as Sourcetable.
What is Forex?
Forex is the abbreviated term for Foreign Exchange, which refers to the global market where currencies are traded. It is primarily the domain of large financial institutions, multinational corporations, and hedge funds.
What is a Pip?
A Pip is a fraction point, and it is the smallest unit of measure to track profit and loss in the Forex market. It is the last decimal point of a price quote, typically 0.0001 for most currency pairs.