Stock Profit Calculator

Stock profit calculator to calculate the total profit or loss on any stock that you buy and sell. The simple stock calculator has options for buying price and selling price as well as trading commissions for each trade. Many online stock brokers now offer commission free trades, the stock calculator gives you the option to leave the trading comission as $0 if you are with one of these brokers.

Stock Calculator

The stock gain calculator requires only three entries to calculate your stock profit, the buy price, sell price, and the number of shares. The symbol, buy and sell commissions are optional field. Many major online stock brokers are now offering $0 commission in trading stocks.

How to Calculate Stock Profit?

Here is the stock calculator formula that is used to calculate stock profit.
1. Total Buy Price = shares * buy price + commissions
2. Total Sell Price = shares * sell price + commission
3. Total Profit or Loss = Total Buy Price - Total Sell Price

For example, if you purchase 100 shares of a stock at a price of $5, and sold it for $6, your profit will be $100. Following is how you would do the calculation assuming the commission fee is $0.

Total Buy Price = 100 * $5 = $500
Total Sell Price = 100* $6 = $600
Total Profit = $600 - $500 = $100

If you own multiple stocks and want to calculate the average price, please use the Average Down Calculator.

How to use the stock gain calculator?

To avoid calculating your stock profit manually, you can use the stock calculator to calculate your stock profits or losses. By entering the total number of shares that you own, buying and selling price, you can get the total ROI for your invesment.

What are Stocks?

Stocks is a type of security that gives the investor a share of ownership of a company. When you buy the stock of a certain company, you are a shareholder. This is different than purchasing bonds, where you are loaning money to the company, and you will be paid back by the company plus interest.

When buying stocks, you become an partial owner of the company. If millions of people purchase the stock, there will be millions of owners of the company.

There are two types of stocks, common and preferred stocks. Common stock gives you voting rights, whereas preferred stock has no voting rights.

Should I Own Stocks?

The main reason why people own stocks is to make money. Over the long term, many good companies' stock price appreciates and gives a good return each year.

Some companies have an average annual return over 10% for many years. If you invest in one of these companies, you can double your money every seven years. This is much better than putting money in the bank where you get a less than 0.5% interest.

In addition to stock appreciation, some companies like Apple and Microsoft pays dividend. Dividends are payments made by companies to its shareholders. In the United States, dividends are generally paid each quarter.

What Are the Risk in Buying Stocks?

While it is rewarding to own stocks that appreciates, there are a lot of risks in buying stocks. First of all, any company may go bankrupt even the big blue chip companies.

When a company goes bankrupt, you may lose all your money on that stock. When the economy is not doing well, most companies will not do well. If you bought a stock before a recession, you may have to wait a couple of years just to break even. Some companies never recover from a recession, and if you happen to hold their stock, you will lose money.

How to Make Money in Stocks

Make money in the stock market is tough. To increase your odds of making a profit, you should learn fundamental analysis for long term investing or technical analysis for short term trading.

Long Term Investing

Fundamental analysis is the study of company fundamentals to determine the fair market price for a stock. Fundamental analysts read income statements and balance sheets to see whether a company is undervalue at the current price.

Fundamental analysts use P/E ratio, Earnings Per Share, return on equity and other financial ratios to help them finding stocks that are trading at a bargain.

There are many other factors that a fundamental analysts look for such as leadership of the company and their competitors.

Investors who use fundamental analysis usually hold their stocks for a long time, usually over a year, so that their stocks have time to appreciated.

The most famous investor of all time, Warren Buffett uses fundamental analysis, and he holds stocks for decades.

Short Term Trading

Technical analysis is a study that tries to predict the short term stock movements. It is widely used by swing and day traders to make a profit trading stocks.

Unlike fundamental analysis, technical analysis does not care about company fundamentals, such as P/E ratio and earnings per share. The only thing that they focus on is it's stock price.

Technical analysts uses stock prices and chart patterns to find patterns that have worked in the past. They believe what works in the past will work again in the future.

Technical analysts developed sophisticated technical indicators which are based on stock prices to forecast whether a stock will go up or down in the next few minutes (day trading) or a few days (swing trading).

Of course, trading is an art, not a science. Situations change from time to time, patterns that have worked in the past may not work this time. Therefore, traders who use technical analysis must also learn to be discipline. Whenever a trade doesn't work, he or she must be able to cut his losses and move on to the next trade.

In addition to technical analysis, psychology is also important when it comes to trading. Anybody can get luck and make money on a trader or two.

To make money consistently from trading, one needs to approach it as a business, and not a hobby. A business requires you to put in time and investment in order for it to succeed. Likewise, a winning trader invest his time studying the market, charts and patterns every single day.

In fact, most people lose money in the stock market because they never learn how the stock market works. Most people buy stocks from tips that they got from friends and families or gurus online, which is a sure way to lose money. The trades may even work a few times, but eventually they will give it all back to the market.

In a nutshell, trading and investing is not easy. If you want to make money from the stock market, you need to put in the time to study and learn.

Stock Market Books to Read

Following are two books that every stock market investors should read.
1. How to Make Money in Stocks - it is one of the best books about the stock market, written by William O'Neil, the founder of Investor's Business Daily.



In this book, the author shows you how to find explosive stocks using the CANSLIM strategy. The seven components of the CANSLIM strategy are

• C = Current earnings, quarterly earnings per share has increase over 25% or more.
• A = Annual earnings has increase over 25% for the past 3-5 years.
• N = New product or service, events, or management that may push the company's stock to new high
• S = Supply & demand, look for stocks that are accumulated by institutions where the volume is high especially during buy points.
• L = Leader or laggard, buy the industry leaders, not the laggards.
• I = Institutional sponsorship, institutions such as pension funds and mutual funds drives market activity, and a top performing stock needs institutional buyers.
• M = Market direction, most stocks follow the direction of the market. When the economy is down, it is hard to find a stock that perform well.

2. The Intelligent Investor - The classic book on value investing, written by Benjamin Graham. It is a timeless book for long term investors and Warrent Buffet's favorite investing book. This book teaches you how to analyze companies and find stocks that are trading at a bargain. You will learn how to use financial ratios such as P/E, Earnings Per Share to determine whether or not a company has potential and buy stocks at the right time. If you want to invest money in the stock market, do not miss this book.

The Importance of Tracking Your Trades

As a trader or an investor, it is important to keep track of your profits and losses on your stocks. Tracking is especially critical for those who do day trading or swing trading to track your trades. Through tracking, a trader can find flaws with their strategy, and be able to learn from his mistakes by analyzing his past trades.

Every trader should keep a trading journal that logs all of their traders. The journal should keep track of all the profits and losses, along with other relevant data that are important to the trading method, such as the patterns used, entry price and exit price, and the ROI.

Many successful traders review their trades regularly so that they can optimize their trading system to maximize profits and minimize risks.

Following is a collection of stock market calculators that you may find useful.