How to Calculate Profit & Loss?

There are two different types of “profit or
loss”, also known as “P/L”. In your trading
platform, you will see something that says
“Unrealized P/L” or “Floating P/L” with
green or red numbers beside them.

If you closed a position with profits, your
account balance will increase. If you closed
with losses, then your account balance will
decrease.

Unrealized Profit and Loss knew as
“Floating P/L” refers to the profit or loss
held in your current open positions
because the value is constantly changing
since the positions are still open.

If you currently have an unrealized profit
then the price moves against you, the
unrealized profit can become an unrealized
loss.

A Realized Profit is profit that comes from
a completed trade. In other words, your
profits only become realized when the
positions are CLOSED.

Realized profit is real profit that can no
longer be affected by price changes
because it is no longer part of an active
trade.

Let’s say your account is in USD and you
open a position Buy 10,000 units EUR/USD
at 1.15000

Then the current exchange rate changes in
EUR/USD is 1.13000.

Since you’re trading a mini lot, each pip is
worth $1. So, you currently have a floating
(unrealized) Loss of $200 (200 pips x $1).

If you CLOSE the position, you will realized
the $200 loss and your balance will be
deducted by $200.

If EUR/USD rose above your original entry
price to 1.16000, then you would now have
a Floating Profit. The position is now up 100
pips. Since you’re trading a mini lot, each
pip is worth $1.

So, you currently have a floating
(unrealized) Profit of $100 (100 pips x $1).
If you CLOSE the position, you will realized
the $100 profit and your balance will be
added by $100.