- Unrealized P&L (Profit and Loss) is the current profit or loss on an open position. The unrealized P&L is a reflection of what profit or loss could be realized if the position were closed at that time. The P&L does not become realized until the position is closed.
- Floating Profit or Loss is the profit or loss that a trader has when they hold an open position. It floats (changes) since it changes in correspondence with the open position(s).
Floating Loss
Floating P/L = Position Size x (Current Price - Entry Price)
Floating P/L = 10,000 x (1.13000 - 1.15000)
-200 = 10,000 x (- 0.0200)
The current exchange rate for EUR/USD is 1.13000.
The position is down 200 pips.
Since you’re trading a mini lot, each pip is worth $1.
So you currently have a Floating Loss of $200 (200 pips x $1).
It is a Floating Loss because you have NOT closed the trade yet.Usually, when a loss remains floating, you are hoping that the price will turn around.
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 Profit of $100 (100 pips x $1).
Realized P/L
A Realized Profit is profit that comes from a completed trade.
Same thing with a loss.
A Realized Loss is a loss that comes from a completed trade.
Realized Loss
Floating P/L = Position Size x (Current Price - Entry Price)
Floating P/L = 10,000 x (1.13000 - 1.15000)
-200 = 10,000 x (- 0.0200)The position is down 200 pips.
And since you’re trading a mini lot, each pip is worth $1.
So you currently have a Floating Loss of $200 (200 pips x $1).
It is a floating loss because you have NOT closed the trade yet.
But you can’t stomach losing anymore and decide to close the trade right then and there.
You’ve realized the $200 loss and the cash is DEDUCTED from your account balance.
When you opened the trade, you had $1,000 as your Balance.
But after you closed the trade with a $200 loss, your Balance is now $800.
Realized Profit
Floating P/L = Position Size x (Current Price - Entry Price)
Floating P/L = 10,000 x (1.16000 - 1.15000)
100 = 10,000 x (0.0100)The current exchange rate for EUR/USD is 1.16000.
The position is up 100 pips.
And since you’re trading a mini lot, each pip is worth $1.
So you currently have a Floating Profit of $100 (100 pips x $1).
It is a floating profit because you have NOT closed the trade yet.
You hear a voice out of nowhere to exit your trade.
So you close the trade.
You’ve realized the $100 gain and the cash is ADDED to your account balance.
When you opened the trade, you had $1,000 as your Balance.
But after you closed the trade with a $100 gain, your Balance is now $1,100.
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