🧱 Basics·beginner

P&L (Profit and Loss)

Also called: pnl, profit and loss, p/l

The total profit or loss on your trades — the scorecard for your trading performance.

P&L is the running total of how much money you've made or lost. It comes in two flavors: realized P&L (from closed trades — locked in) and unrealized P&L (from open trades — still moving). Pros track both, but the realized number is the only one that matters at the end of the month. P&L can be measured in dollars, in pips, in R-multiples (multiples of your initial risk), or as a percentage of starting equity. Each tells a different story. Dollars matter for taxes. Pips matter for system evaluation. R-multiples matter for risk-adjusted thinking. Percentages matter for compounding. A trader who's up $5,000 on a $10,000 account is up 50%. The same trader up $5,000 on a $1,000,000 account is up 0.5%. Both numbers are real, but only one of them tells you anything useful about the trader's skill.

Real trade example

Prop firms like FTMO measure traders on a profit target (usually 8-10%) over 30 days, with strict daily drawdown limits. The P&L scorecard is the entire evaluation.

Related terms

Equity

beginner

Balance plus or minus your current floating P&L — what you'd have if you closed every trade right now.

Drawdown

intermediate

The peak-to-trough drop in your account equity — a measure of how bad your worst losing streak got.

R-Multiple

intermediate

A unit that measures profit or loss in multiples of the initial risk taken on a trade — normalizes performance across different position sizes.

Win Rate

beginner

The percentage of your trades that close profitably — one half of the equation that determines profitability.

Expectancy

advanced

The average dollar (or R) amount you can expect to make per trade over many trades — the math behind whether a strategy works.

Pip

beginner

The smallest standard price move in a currency pair — the building block of every forex profit or loss.

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