Floating profit and loss in gold trading

Floating profit and loss is the unrealized result of positions that are still open, recalculated on every tick from the current bid (for longs) or ask (for shorts). It is added to the balance to give equity, and it disappears into the balance when the trade is closed.

How it applies to gold trading

Gold’s daily range of tens of dollars makes floating P&L swing hard. On 1 lot, a $20 pullback is $2,000 of floating loss that can appear and disappear within an hour. Because margin level is calculated from equity, floating losses reduce free margin and can trigger a margin call or stop-out long before a trade’s stop-loss is reached if the position is too large.

Floating profit is not money in the account. A winning gold trade can give back its whole open profit during a news spike, so traders who manage open profit use partial closes, breakeven stops or trailing stops rather than watching the number.

Worked example

Example (hypothetical numbers): you are long 0.30 lots from 3,980. Gold trades at 4,005 bid. Floating profit is $25 × 100 × 0.30 = $750. If gold dips back to 3,990, it shrinks to $300. Only when you close does the result move to the balance.

A common mistake

Counting open profit as earned and increasing size on other trades because of it. Size from equity at your stop, not from the best floating figure of the day.

See also: Balance, Equity, Profit and loss, Partial close.

Frequently asked questions