In trading, PNL (Profit and Loss) refers to the financial outcome of a trade or a series of trades. It's calculated by subtracting the cost of trades from the revenue generated.
Key Aspects of PNL in Trading:
- Realized PNL: Profits or losses from closed trades.
- Unrealized PNL: Profits or losses from open trades.
- PNL Percentage: The percentage gain or loss relative to the initial investment.
Importance of PNL:
- Performance Measurement: PNL helps traders evaluate their performance.
- Risk Management: Monitoring PNL is crucial for managing risk and adjusting strategies.