How is profit on financial markets calculated?

When trading on the financial markets, you buy or sell financial instruments based on the expectation that their prices will either rise or fall.

If you expect the price to rise, you open a buy order. Conversely, you open a sell order if you anticipate the price falling.

Your profit is the difference between the price you buy or sell the asset and the price at which the order is closed, minus any spread or commission charged by the broker.

For example:

You purchased 1 lot of EURUSD at 1.2291, which is 100,000 EUR. 

(1 lot is 100,000 units of the base currency) for 122,910 USD (1.2291 x 100,000).

Later, the price rises to 1.2391, and you close the position. The 100,000 EUR you bought is now worth 123,910 USD (1.2391 x 100,000).

Your profit is 123,910 – 122,910 = 1,000 USD.