Unrealized Gain/Loss is one of those terms you hear in forex trading that sounds like it’s hiding something big. 

You see the numbers going up or down on your trading screen, but what do they really mean? Are you making money? Are you losing? Or is it all just a number that could disappear if you blink too fast?

If you’ve ever opened a trade and noticed a profit or loss showing, even before you close it, you’re already dealing with something called Unrealized Gain or Loss. 

But what does that really mean? Is it your money now? Can you spend it? Why does it sometimes feel like you’re winning, and then the next minute… you’re not?

Let’s look into it in a simple way that even a complete beginner in forex can understand. 

By the time you’re done reading this, you’ll finally get what Unrealized Gain/Loss truly means in forex and why every trader should keep an eye on it.

What is Unrealized Gain/Loss in Forex?

In simple terms, Unrealized Gain or Loss is the money you could gain or lose if you closed your trade right now.

Let’s put it like this:

• You bought EUR/USD at 1.1000.
• The price goes up to 1.1050.
• On your trading platform, you’ll see a +50 pips profit.

That profit you see is called an unrealized gain, because you haven’t actually closed the trade yet. The market is still running. Your profit can increase, decrease, or even turn into a loss.

Now let’s look at it the other way:

• You bought EUR/USD at 1.1000.
• The price drops to 1.0950.
• You see a 50-pip loss.

That’s called an unrealized loss. It’s not a real loss until you close the trade.

Key Point

Unrealized Gain/Loss = Floating Profit or Loss

It’s the value of your open trades at the current market price.

Why Should You Care?

You might think, “If I’m not closing the trade yet, why should I worry?”

Below is why it matters:

• Margin level: Unrealized losses reduce your available margin. If your losses grow too big, you might get a margin call or even have your trade closed automatically.
• False hope: A big unrealized gain might tempt you to hold too long and lose it all.
• Emotional stress: Seeing red numbers (losses) can make you panic. Green numbers (profits) might make you greedy. Both can affect your trading decisions.

Example of Unrealized Loss in Forex

Let’s say you bought GBP/USD at 1.3000 with $1,000.

• The market drops to 1.2950.
• You see a $50 loss on your screen.
• That $50 is an unrealized loss. It’s not gone yet. But it could be if you don’t manage your trade.

If the market goes back up to 1.3000, you’re back to zero. If it rises above 1.3000, you start seeing an unrealized gain.

Simple, right?

When Does It Become Real?

This is the rule:

As long as your trade is still open, your profit or loss is unrealized.

When you close the trade, it becomes realized.

That’s when it goes into your balance, and you can use it or withdraw it.

So, what should you do?

• Watch your trades: Unrealized gains and losses show what could happen if you close now.
• Use stop loss/take profit: Don’t just hope. Plan your exits.
• Understand your emotions: Don’t get carried away by floating profits or scared by temporary losses.

Add This to Your Forex Dictionary

Unrealized Gain/Loss is one of those forex terms that every trader needs to understand, even if you’re just starting out. 

It shows the possible outcome of your trades before you take action. Think of it like a preview, not the final movie.

So next time you see that green or red number on your screen, you’ll know exactly what it means and what to do about it.