How Trade P&L Works

Your profit or loss is calculated from the pip difference between entry and exit, multiplied by the value of each pip at your lot size.

Formula: P&L = Pips × Pip Value × Lot Size. For a long EUR/USD trade entering at 1.0850 and exiting at 1.0920 with 1 standard lot: 70 pips × $10 = $700 profit.

Does this include spread and commission?

No — this calculates gross P&L. To get net P&L, subtract your broker's spread (typically 0.5–2 pips for majors) and any commission. You can account for spread by adjusting your entry price by the spread amount.

How do I calculate P&L for indices or commodities?

The same principle applies, but the pip value differs. For US30 (Dow Jones), 1 point = $1 per contract. For gold (XAU/USD), $0.01 move = $1 per standard lot. Adjust the pip value accordingly.