Risk Management | Technique
P&L (Profit & Loss)
"P&L (Profit & Loss) is the fundamental measure of trader performance, summarizing realized and unrealized gains and losses over a given period."
In-Depth Definition
P&L (Profit and Loss), or the trading income statement, is the difference between revenues (gains on trades) and costs (losses on trades + commissions + slippage + overnight financing costs). We distinguish realized P&L (on closed positions) from unrealized or mark-to-market P&L (on still-open positions, valued at the current market price). Daily P&L is the daily reference indicator in professional trading rooms. P&L must be analyzed in depth: a positive P&L can mask excessive risk-taking (if return is insufficient relative to drawdown suffered). P&L analysis by strategy, asset, trading session, and position size identifies profitability sources and improvement areas.
StarQuant Insight
StarQuant automatically breaks down P&L by strategy, asset, and period in its Trading Journal, enabling granular performance source analysis and identification of recurring gain and loss patterns.
Pro Tip
Don't check your P&L minute by minute: it's the best way to make emotional decisions. Evaluate performance over meaningful periods (weeks, months) and focus on respecting your process rather than instantaneous P&L.