Getting to know the currency forex market trading industry, you need to know what unrealized and realized profit and loss is.

Remember that 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 profit and loss based on where you could close your open positions in the currency forex market trading at that instant. Depending on you’re going long in currency forex market trading, the calculation will be based on when you can sell at the moment. If you are going short, the calculation will be based on when you can buy at the moment. Your margin balance is the sum of your initial margin deposit, your unrealized profit and loss and your realized profit and loss.

Realized profit and loss is what you get when you close out a trade position or portion of a trade position. If you close out the full position and go flat, what you made or lost leaves the unrealized profit and loss calculation and goes into your margin balance. If you only close a portion of your open positions, only that part of the trades profit and loss is realized and goes in the margin balance. Your unrealized profit and loss will continue to fluctuate based on remaining open positions and so will your total margin balance.

If you have a winning position, your unrealized profit and loss will be positive and your margin balance will increase. If the market is moving against your positions, you unrealized profit and loss will be negative and your margin balance will be reduced. Forex prices are constantly trading, and thus your market to market unrealized profit and loss total margin balance will also fluctuate and change as well.

For more information about currency forex market trading see forex currency trading

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