Why do I always lose a bit of money between P/L and Gross P/L? Is this slippage in how the order is filled? It seems to scale with the number of pips though, so it seems more like interest? The definition on the FXCM page just says that it is the sum of all the trades of that currency, but that doesn’t seem to be what’s happening.
Hi Merper,
From what you describe, this doesn’t seem to be a case of slippage. It’s possible you’re not taking into account two factors: Pip Cost and Amount.
[B]P/L[/B] is the number of pips you are making or losing on a trade.
[B]Gross P/L[/B] is how much your are making or losing in terms of your account currency.
[B]Gross P/L = P/L * Pip Cost * Amount[/B]
[B]Pip Cost[/B] is the value of a pip in terms of your account currency for a 1k microlot trade size.
Note in the illustration above from the Simple Dealing Rates tab of the FXCM Trading Station that Pip Cost is determined by the counter currency (the second currency in the pair). Since this is a USD account, the pip costs are shown in US dollars and cents.
[B]Amount[/B] is the size of your trade in microlots.
Note in the illustration above there are two USD/JPY trades for 8k and 1k respectively. As a result, the Gross P/L is 8 times greater for the 8k trade than for the 1k trade.
If Pip Cost and Amount do not account for the discrepancy you see between your P/L and Gross P/L, please let me know.
Jason
Yeah, thanks, this was stupid on my part. I was trading mini lots so each pip was around but not exactly $1.
No problem, Merper. I’m glad we got that straightened out 