Glossary Term

Profit & Loss (PnL)

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Profit and loss is simply a way of calculating your performance on the markets. It’s a fundamental metric of how well or poorly an investor or trader is doing. It is calculated by taking the average profit you make on trades that go in your favor and dividing this number by the average loss incurred by your losing trades. What you are left with after performing the calculation is a ration. The first number needs to be higher than the second number in order for you to be doing well. For instance a profit and loss of 3:1 means that your account only incurs a loss for every three winning trades.

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What is profit & loss (PnL)? A Traders Expert explanation

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