Floating PnL

The unrealized profit or loss on open positions — tracked live, affects equity-based drawdowns, ignored by balance-based drawdowns.

Definition

Floating PnL (also called unrealized PnL) is the live profit or loss on open positions before they are closed. It changes tick-by-tick as prices move: a long EUR/USD position that is 15 pips in the red has -$150 floating PnL on 1 lot; the same position at 20 pips in the green has +$200 floating PnL. Floating PnL is distinct from realized PnL, which only registers when a position closes. For prop firm accounting, the critical distinction is how each drawdown type treats floating PnL: equity-based drawdowns count it immediately; balance-based drawdowns ignore it entirely until the position closes.

Example

A trader on a $100K equity-drawdown account with a 10% max drawdown ($90K floor) opens a 1-lot EUR/USD long at 1.0850. Price drops 100 pips to 1.0750, floating PnL is -$1,000. Equity is $99,000 — well above the floor. Price then drops another 900 pips to 1.0660; floating PnL is -$10,000. Equity is $90,000 — at the floor. The next tick down triggers equity-drawdown breach, even though the trade has not closed. On a balance-drawdown account with the same numbers, the breach would only register if the trader closed the position.

Why It Matters

Floating PnL is the single biggest conceptual gotcha for traders switching between balance- and equity-drawdown firms. A strategy that held losing positions and let them recover works fine on FTMO (balance-drawdown) but can blow up on Apex or Topstep (equity-drawdown) with the exact same trade sequence. Traders should know their firm's drawdown calculation method cold — and recognize that equity-based drawdowns effectively turn a drawdown rule into a stop-out rule for bad trades, because the floating loss counts before the trader has a chance to react.

Related Terms

Equity Drawdown
A drawdown calculated from real-time account equity — open positions and unrealized losses count toward the limit tick-by-tick.
Balance Drawdown
A drawdown calculated from closed-trade balance only — open positions and unrealized PnL don't count toward the limit.
Max Drawdown
The overall account loss cap — the total amount an account can drop before the firm closes it.
Spread
The price difference between the best bid and best ask — the implicit cost of opening and closing a position, quoted in pips.
← All termsLast updated 2026-04-21