You can learn everything about trading. This is the sixth chapter of the Beginner Course about

Calculating Profit and Loss.

**In this chapter, you will learn about:**

- Basic knowledge about Profit and Loss
- What is the Realized and Unrealized
- Profit and Loss
- How to Calculate the Profit and Loss

## Introduction to Profit & Loss

There are two different types of “**profit orloss**”, 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 vs Realized Profit & Loss

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.

## Calculating Floating & Realized Loss

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.

## Calculating Floating & Realized Profit

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 **100pips**. 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.