Profit and loss calculation seems simple, but many traders fail to account for fees — and that makes the difference between thinking you are profitable and actually being profitable.
The P&L Formula
Gross P&L = (Sell Price - Buy Price) x Quantity
Net P&L = Gross P&L - Total Fees
ROI = Net P&L / Total Investment
Why Net P&L Matters
Consider a day trader making 5 trades per day with $10 round-trip commissions:
- Daily commission cost: $50
- Monthly (20 trading days): $1,000
- Annually: $12,000
If this trader’s gross profits are $15,000/year, their net profit is only $3,000. Without tracking fees, they might think they are earning $15,000.
Fee Types to Include
- Broker commission: Per-trade flat fee or per-share rate
- Exchange fees: SEC fees, TAF fees (small but add up)
- Spread cost: Difference between bid and ask (hidden cost)
- Slippage: Difference between expected and actual execution price
P&L Tracking Best Practices
- Always track net P&L, never just gross
- Include all fees — commissions, exchange fees, spread
- Calculate per-trade averages, not just totals
- Compare against benchmark (what would buy-and-hold have earned?)
How JournalPlus Helps
JournalPlus automatically calculates net P&L for every trade including all broker charges, exchange fees, and taxes. See your true profitability — not the inflated gross number — and identify which setups genuinely make money after costs.
