What is PNL?
PNL (Profit and Loss) is a financial indicator used to calculate profits and losses in various industries and investment activities. It reflects the amount of money gained or lost as a result of a particular transaction. It is an important indicator that helps analyze trading decisions from a profit or loss perspective and assess the success of a trading strategy.
PNL (Profit and Loss) helps determine the profitability of an investment or trading activity by calculating the difference between the amount of expenses and earnings.
Realized PNL (rPNL) - reflects the profit or loss for a closed trading position, indicated by a number. If the position was closed completely, then rPNL reflects the final result of the trade, if partially - the profit or loss for the part of the position that was closed.
Unrealized PNL (uPNL) reflects the profit or loss for an open trading position in digital equivalent and as a percentage.
PNL is calculated using the formula: PNL = (Exit Price × Number of Units Sold) − (Entry Price × Number of Units Bought) − Commissions.
Overall, PNL is an important risk management tool that helps make decisions based on objective data.