PnL in Cryptocurrencies: Complete Guide for Traders

What is PnL in Trading?

🔹 Essential Definition

Gains and Losses (PnL) is a fundamental financial indicator that accurately measures the economic performance of trades in crypto markets. It precisely quantifies how much capital a trader has generated or lost during a specific period of activity.

Types of PnL Every Trader Should Know

🔸 Realized PnL:

➤ Represents confirmed gains or losses from positions that have been fully closed.

✅ Funds secured and available for withdrawal or reinvestment.

🔸 Unrealized PnL (Paper PnL):

➤ Reflects potential gains or losses on currently open positions.

📉 It constantly fluctuates according to market movements and can disappear quickly in volatile markets.

Precise PnL Calculation

📊 Basic Formula:

PnL = Total Revenue - Total Costs

In trading operations:

PnL = (Selling Price - Buying Price) × Quantity - Commissions

PnL in Action: Practical Example

🔹 Trading Scenario:

You buy 1 BTC for $40,000 and then sell it for $45,000:

PnL = (45,000 - 40,000) × 1 = $5,000 profit

Note: This calculation does not include platform fees that would reduce the final profit.

Importance of PnL for Traders

🔸 Critical functions of the PnL:

• Allows for an objective evaluation of strategy performance
• Base decisions on concrete data
• Provides necessary information for tax declarations
• Fundamental element for risk management in trading

Personal Performance Analysis

Example of monthly tracking:

2025-05-23~2025-06-21

+$2,23

+32.79%

In professional trading platforms, detailed tracking of PnL allows users to optimize their strategies and maximize their long-term performance.