Running profit/loss definition
Running profit/loss
Your running profit or loss refers to the money you currently stand to gain or lose should you close your open trades. On most trading platforms a running profit will show as green and a running loss as red. If the sum of your positions is green, you have a running profit, and if the sum of your positions is in the red, you have a running loss.
Displaying your trades as running profits or losses helps to visualize where you stand hypothetically without actually closing any trades.
How to lock in running profit
You can lock in a running profit by adjusting your stop loss when the market price moves in your favour. There are two ways you can lock in profits.
- Actively managing your positions is a hands-on strategy that requires traders to readjust the stop loss as the market price changes. On a long position, you would move your stop loss up when the price goes up, and down on a short position when the market price lowers.
- Trailing stops allow you to enter a stop loss that automatically moves when the market price moves in your favour to automatically lock in running profits without requiring you to constantly manage the trade.