P&L. Why would I need that?

Cryptocurrencies.ai
Jan 7 · 3 min read

Profit & Loss is a financial statement sent by Cryptocurrencies.Ai to traders. It summarizes all open positions of a trader based on the results of profit or loss. It is exactly in the P&L indicator that the success and failures of a trader are measured.

This is a financial statement that summarizes the income, costs and expenses incurred over a selected period of time. These indicators provide information that shows the trader his ability to make a profit, increasing income and reducing costs. It is an excellent tool for researching your performance, analyzing your actions and strategy development.

Realized, Unrealized, Total. How it works?

All your trades will reflect real-time market changes. This reflection of the market price shows the unrealized P&L of your transactions. The term “unrealized” here means that your transactions are still open and can be closed by you at any time. The value of the market price is that it is the price at which you can close your transaction at any given time. If you have a long position open, the market price is the price at which you can sell (Bid price). In case of a short position, it is the price at which you can buy to close the position (Ask price).

Until the position is closed, profit or loss remains unrealized. Once you close a position, profit or loss become realized.

The actual calculation of profit & loss on the current market position is very straightforward. To calculate P&L by position, all you need is the size of the market position and the value by which the price moved. Actual profit or loss will be equal to the size of the position multiplied by the movement in pips.

Let’s take a case study of this

Precise position setting in Cryptocurrencies.ai interface

Suppose you open a long position in the BTC/USDT pair on the futures market. You entered the position by buying a long one at 7874.23 USDT price for 1 BTC amount. With 100x leverage, you only need 78.74 USDT to make this trade.

Entry point on the candle chart

The price continued to grow and reached 7898 USDT. Until you close this position, your profit will be unrealized, but you will know the exact amount of profit before you close the position. The BTC price has changed by exactly 24 USDT and since your purchase is equal to 1 BTC, your unrealized P&L will be 24 USDT.

You decided to wait a little bit, considering that the price will continue to rise, but it fell and to avoid risk you decided to close the position at 7890 USDT. After closing the position, your Realized P&L for this transaction was 16 USDT.

The closing point of the trade

Summing up

So, on the example of one transaction, we considered the calculation principle and learned about the benefits of the P&L account.

But that’s not all. We at Cryptocurrencies.ai do profix & loss calculations not only for specific trades, but also for specific coins and your portfolio as a whole for a day, week, month and even a year!

Become a part of the future. Become Cryptocurrencies.Ai

Cryptocurrencies.ai

Written by

Smart tools for calm trading and portfolio management. A single platform for all your spot and futures accounts to manage risk and grow your portfolio

More From Medium

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade