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FOREX Pip and Profit Calculator

This Jupyter Notebook helps Forex traders calculate pip values and potential profits based on currency pairs, lot sizes, and pip movements. It fetches live exchange rates using Yahoo Finance and provides real-time calculations for pip values and profit estimation.

Features

  • Live Exchange Rate Fetching: Fetches live exchange rates for various currency pairs using the yfinance API.
  • Pip Value Calculation: Calculates pip values based on the currency pair, lot size, and exchange rate.
  • Profit Calculation: Estimates potential profit based on the number of pips the market has moved.
  • User Inputs: The user can input the currency pair, lot size, and expected pip movement for instant calculations.

How It Works

1. User Inputs

Users provide the following inputs:

  • Currency Pair: e.g., EURUSD, GBPJPY
  • Lot Size: e.g., 1.0, 0.1, or 0.01
  • Pip Movement: The expected change in pips (positive for profit, negative for loss)

2. Live Exchange Rate Fetching

The notebook fetches the live exchange rate for the selected currency pair using the Yahoo Finance API (yfinance).

3. Pip Value Calculation

The pip value is calculated based on the lot size and the exchange rate of the currency pair. The formula used is:

$$ \text{Pip Value} = \frac{\text{Pip Size}}{\text{Exchange Rate}} \times \text{Lot Size} $$

Where:

  • Pip Size is 0.0001 for most currency pairs, but for pairs involving JPY, it's 0.01.
  • Exchange Rate is the live exchange rate of the currency pair.
  • Lot Size is the number of units being traded.

For example, in the case of EURUSD with a lot size of 1.0 and an exchange rate of 1.0965: $$ \text{Pip Value} = \frac{0.0001}{1.0965} \times 1.0 = 0.0000912 , \text{USD} $$

4. Profit Calculation

The profit or loss from the trade is calculated using the following formula:

$$ \text{Profit/Loss} = \text{Pip Value} \times \text{Pip Movement} $$

Where:

  • Pip Value is the value of one pip for the given currency pair and lot size.
  • Pip Movement is the number of pips the market moves (can be positive for gains or negative for losses).

For example, if the pip movement is 50 pips and the pip value is 0.0000912 USD, the profit would be:

$$ \text{Profit} = 0.0000912 \times 50 = 0.00456 , \text{USD} $$

5. Output

The notebook provides the following outputs:

  • Live Exchange Rate for the selected currency pair.
  • Pip Value based on the given lot size and exchange rate.
  • Estimated Profit or Loss based on the pip movement and pip value.

Example Workflow

For a user trading the EUR/USD pair with a lot size of 1.0 and an expected pip movement of 50 pips:

  • If the live exchange rate is 1.0965, the pip value will be calculated as:

    $$ \frac{0.0001}{1.0965} \times 1.0 = 0.0000912 , \text{USD} $$

  • If the market moves 50 pips, the estimated profit would be:

    $$ 0.0000912 \times 50 = 0.00456 , \text{USD} $$

The notebook provides an easy way to estimate how much profit or loss a trader can expect from their trade.

Prerequisites

Before running the notebook, install the necessary dependencies:

  • Python 3.x
  • pandas for data manipulation
  • yfinance for fetching live exchange rates

You can install the required libraries using the following command:

pip install pandas yfinance

How to Run the Notebook

  1. Clone or download the repository.
  2. Install the dependencies: 
    pip install pandas yfinance
  3. Open the FOREXpipCalc.ipynb notebook and run all cells.
  4. Provide the required inputs (currency pair, lot size, pip movement) and view the results.

Future Enhancements

  • Live Alerts: Integrate live alerts for specific currency movements.
  • Leverage Support: Add leverage calculations to estimate profit/loss with leverage.
  • Historical Data: Add an option to analyze historical data for better trade planning.

License

This project is licensed under the MIT License - see the LICENSE file for details.