1. What is Trading Profit/Loss?

Trading profit/loss (P/L) is the net result of a trade after accounting for purchase price, sale price, quantity traded, and any associated fees. It measures the financial performance of a trading activity.

2. How Does the Calculator Work?

The calculator uses the trading P/L formula:

Where:

• \( Sell \) — Selling price per unit
• \( Buy \) — Purchase price per unit
• \( Quantity \) — Number of units traded
• \( Fees \) — Total transaction fees

Explanation: The formula calculates the gross profit (sell minus buy multiplied by quantity) then subtracts any trading fees to get the net profit or loss.

3. Importance of Calculating P/L

Details: Accurate P/L calculation is essential for evaluating trading performance, tax reporting, risk management, and making informed trading decisions.

4. Using the Calculator

Tips: Enter all prices in your base currency, quantity in whole numbers, and include all transaction fees. Positive results indicate profit, negative results indicate loss.

5. Frequently Asked Questions (FAQ)

Q1: Should I include all trading fees?
A: Yes, for accurate P/L calculation, include all commissions, exchange fees, and transaction costs.

Q2: How do I handle multiple trades of the same asset?
A: You can either calculate each trade separately or use average buy/sell prices across all trades.

Q3: What if I have partial sells?
A: You'll need to track your remaining position and cost basis separately for accurate ongoing P/L.

Q4: Does this work for short selling?
A: Yes, just reverse the buy and sell prices (enter the short sale as "buy" and buy-to-cover as "sell").

Q5: How do I account for dividends or interest?
A: This calculator doesn't include those factors. You would need to add dividends received or subtract interest paid separately.