Making Profit is at the center of trading, so it is important to be fully informed about how profit and loss are calculated in Coinrule.
Traders need to identify and measure the profitability of their strategies.
Coinrule has been designed to show the exact performance of your rules and what it adds to your holdings; hence, the net profit on the dashboard is the total profit of all the rules that have been run on the account.
However, once a rule is deleted or completed, it seizes to be considered in the net profit. It is important to keep in mind that profit calculation is not considered in demo rules. The net profit on the dashboard counts active rule, plus paused rules and rules you have been running in the past.
Possible Differences between Profit and Loss on Coinrule and Exchanges
When Trades are performed manually on the exchange, Coinrule doesn’t consider the manually sold coins when calculating profit and loss.
That implies that the profit and loss is calculated on Coinrule as though the manual trade never happened.
If 1 ETH is sold at $500, and the current price is $450. If the trader repurchases the coin manually at $450, the trader has profited by $50. However, that will not reflect the Coinrule net profit should the price change because the sale was made manually.
As a rule of thumb, any trade that happens outside of a rule is not considered. This is because every rule considers its actions to give a proper overview of what value a rule can specifically add to the wallet.
Also, the profit doesn’t consider the trading fees shown separately on the activity page, thereby giving you the accurate value of your holdings.
Overall, the profit calculation in Coinrule is designed to portray the real value that Coinrule adds to one’s wallet while trading. The total profit on the dashboard gives a trader an overall idea of his performance while trading. Having a proper profit calculation allows traders to reassess their strategies’ success or failure and adjust accordingly.
Realized and Unrealized Profit
The profit of each rule takes into account the performance of all trades the rule executes, both open and closed.
Rules can open multiple trades at the same time. Therefore, to calculate the P&L of a rule, we need to consider trades that are closed and still active and open. To do that, Coinrule uses the concept of realized and unrealized profit when calculating the P&L of a rule.
An unrealized profit or loss refers to trades that are still open, for example, coins bought and not sold or vice versa. It uses the current market price of that coin relative to the entry price as a reference. As the price of an asset fluctuates, the unrealized profit can change over time until the trade is closed. Therefore, your profits will not be secured (realized) until you close the trade and sell the coins you have purchased.
You buy 1 ETH at $500.
After one day, the current market price is $600, so the P&L will show a profit of $100.
The following day the current market price drops to $550, so the P&L will decrease by $50, resulting in the unrealized P&L of the trade being $50.
Instead, a realized profit or loss refers to trades that are complete where the coins have been sold. Here the calculation compares the exit with the entry price. Thus, the realized P&L does not fluctuate as it illustrates the performance of each closed trade.
Movements in price do not affect the realized P&L as you have sold the coins and closed the trade. This secures your profits and enables you to re-invest the capital in other trades. In addition, if you realize your profits into stablecoins, such as USDT, DAI, or USDC, you will not be exposed to volatility and any price movements. This is due to the price of these assets not fluctuating and changing.
You buy 1 ETH at $500.
After one day, the current market price is $600, and you sell at that price and realize this gain. The realized P&L will show a profit of $100.
The following day the current market price for 1 ETH decreases to $550, but you sold all the coins, so the P&L is still $100.
This is an example of what your Live account may look like on the Rules Dashboard.
Net Profit is the amount of profit your Rules have made in total, deducting all realized losses.
Total Growth equals the Net Profit divided by the value of all the wallets you have connected to Coinrule via API.