Unrealized Profit

Definition - What does Unrealized Profit mean?

An unrealized profit refers to a gain in an open position. Until the position is closed, the gain is considered to be unrealized profit as opposed to a realized profit. Unrealized profits are also referred to as paper profits.

ForexDictionary explains Unrealized Profit

Until a position is closed out, the gains on it can vanish if the trade moves against the trader. This is the reason why it is a good idea for forex traders to take profits regularly rather than trying to make killer trades. Until trades are closed, no money is going into your pocket.
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