Every trade ends with one of two things:

But here’s the real question:
👉 PnL

WHAT_IS_PnL

PnL stands for Profit and Loss.

It is the final result of your trade.
→ How much you made
→ Or how much you lost

It’s the pulse of your trading account.

TWO_FORMULAS

To calculate PnL, you use one of two formulas:
👉 depending on your position — Long or Short.

These formulas are built on three variables:
→ Entry — the price where you open the position
→ Exit — the price where you close the position
→ Size — how much you are trading

Size defines the scale of your result. We’ll come back to it in a moment.

LONG_POSITION (BUY FIRST)

When you go Long, you expect the price to rise.
👉 You buy first
👉 You sell later

The Formula:
PnL=(Exit−Entry)×Size

Example:
→ Buy at 10$
→ Sell at 12$
→ Size = 1

(12−10)×1=+2
👉 Profit = +2$

Loss example:
→ Buy at 10$
→ Sell at 8$
→ Size = 1

(8−10)×1=−2
👉 Loss = -2$

SHORT_POSITION (SELL FIRST)

When you go Short, you expect the price to fall.
👉 You sell first
👉 You buy back later

The Formula:
PnL=(Entry−Exit)×Size

Example:
→ Sell at 10$
→ Buy back at 8$
→ Size = 1

(10−8)×1=+2
👉 Profit = +2$

Loss example:
→ Sell at 10$
→ Buy back at 12$
→ Size = 1

(10−12)×1=−2
👉 Loss = -2$

THE SIMPLE RULE

Long → profit when price goes UP

Short → profit when price goes DOWN

THE_POWER_OF_SIZE

Now — Size.

This is your multiplier. It scales your results — both profit and loss.

Example (Long trade):
→ Buy at 10$
→ Sell at 12
→ Size = 5

(12−10)×5=10
👉 Profit = 10$

if Size = 10

(12−10)×10=20
👉 Profit = 20

Same move in price. Completely different result.

On the exact same price movement, both profit and loss increase with size.

THE_CORE_TRUTH

Your entire PnL depends on three variables:
→ Entry
→ Exit
→ Size

That’s the whole game. Everything else is noise.

INTERACTIVE PnL SIMULATOR

NEXT_PHASE

Now you know how trading results are calculated.

The next question is practical. How do traders actually enter and exit the market?

The next module introduces the language of execution:
Order Types.