Unrealized and realized profit and loss

Most online forex brokers provide real-time mark-to-market
calculations showing your margin balance. Mark-to-market is
the calculation that shows your unrealized P&L based on
where you could close your open positions in the market at
that instant. Depending on your broker’s trading platform, if
you’re long, the calculation will typically be based on where
you could sell at that moment. If you’re short, the price used
will be where you can buy at that moment. Your margin bal-
ance is the sum of your initial margin deposit, your unrealized
P&L, and your realized P&L.
Realized P&L is what you get when you close out a trade posi-
tion, or a portion of a trade position. If you close out the full
position and go flat, whatever you made or lost leaves the
unrealized P&L calculation and goes into your margin balance.
If you only close a portion of your open positions, only that
part of the trade’s P&L is realized and goes into the margin bal-
ance. Your unrealized P&L continues to fluctuate based on the
remaining open positions, as does your total margin balance.
If you’ve got a winning position open, your unrealized P&L is
positive and your margin balance increases. If the market is
moving against your positions, your unrealized P&L is nega-
tive and your margin balance is reduced. Forex prices change
constantly, so your mark-to-market unrealized P&L and total
margin balance also change constantly.