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The Tool to Improve Your Investing Strategy

Cryptocurrency trading is highly volatile, so understanding the concept of profit and loss (PnL) is essential for informed decisions . PnL tells you how much money you’ve made or lost over a certain time and, therefore, helps you stay aware of how well your trades are doing and if your investing strategies are working. This newsletter provides a quick overview, with more details in our full article.

PnL explained

What Is PnL?

Profit and loss (PnL) is a metric for assessing financial performance and the effectiveness of trading strategies. PnL can be realized (profit or loss from trades you’ve completed) & unrealized (potential profit or loss on trades you’re still holding).

Examples of PnL Calculation

Long Trade: Buying 1 BTC at $50,000 and selling at $60,000 results in a realized profit of $10,000.

Short Trade: Selling 1 ETH at $2,500 and buying back at $2,000 results in a realized profit of $500.

PnL Calculation Methods

FIFO (First-in, First-out): Assumes the first assets bought are the first sold.

LIFO (Last-in, First-out): Assumes the last assets bought are the first sold.

Weighted Average Cost: Averages the cost of all assets to calculate PnL.

Swap coins & try PnL

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Any information provided in this email does not constitute investment advice or investment recommendation nor does it constitute an offer to buy or sell or a solicitation of an offer to buy or sell digital assets or other financial instruments described in this email. In particular, this information should not be used as a substitute for suitable investment and product-related advice. Unless expressly stated otherwise, all pricing information is non-binding.

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