Floating P&L is the unrealised profit or loss on all currently open positions — the gain or loss that exists in real time but has not been locked in by closing a trade. It is the difference between the current market price of an open position and the price at which it was entered, multiplied by position size.

Floating P&L is the most operationally significant account metric in a funded evaluation because it feeds directly into equity — and equity is what most modern risk limits measure against, in real time, tick by tick.

Floating P&L versus realised P&L

Realised P&L is profit or loss that has been locked in by closing a trade — it changes the account balance permanently. Floating P&L exists only while a position is open; it disappears the moment the trade closes, replaced by a realised figure. The key distinction for evaluation traders:

• Balance reflects only realised results — it does not move while positions are open.
• Equity reflects balance plus or minus all floating P&L — it moves with every price tick on every open position.

Under an equity-based daily loss limit or trailing drawdown, a position that is $800 in floating loss is already consuming $800 of the risk limit — even if the trade is never closed at that loss. The limit does not wait for the trade to close.

How floating P&L affects the drawdown floor

Under a trailing drawdown model that trails equity, a winning open position raises the drawdown floor as it moves into profit — even before the trade is closed. If the position then reverses and closes at breakeven, the floor has permanently risen while the balance has not changed. The trader has consumed drawdown room without capturing any realised gain.

This asymmetry — floating gains raise the floor, floating losses consume limit room — is the core mechanical reason why understanding floating P&L is non-negotiable in trailing-drawdown evaluations. A trade that looked like a winner on paper may leave the account structurally worse off if it reverses before being closed.

Practical implications

• Never assess available risk room from balance alone — always check equity with positions open.
• On a trailing-equity model, large floating gains create an obligation to close decisively: letting them reverse is more costly than the lost upside.
• Multiple open positions aggregate their floating P&L — correlated positions in the same direction compound the exposure against the daily limit simultaneously.

For the full mechanics, see equity, balance, trailing drawdown, daily loss limit, and drawdown floor.

FundedProp provides simulated trading evaluations. All accounts are demo accounts; no real capital is traded by participants. This is not investment advice.