How to calculate P&L for a given period of time
Let's say I have a currency trading app. I start with 0 USD, and after 4 weeks, though trades, I now have 0 USD. My P&L would be 100$ or up 0.
So the calc would be: P&L = start_value - current_value
Now, in a similar scenario, I start the month with 0 USD, 2 weeks later I add USD, 2 weeks later I now have 0 USD. How do I calculate the P&L for the last four weeks, considering I added in the middle?
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You could say
P/L_1 = V - 0
P/L_2 = 0 - (v + ) = 0 - V
So that gives us the profit or loss for the first two weeks and then the second two weeks (V is the value at two weeks, when you add the ). But if we add those, the V cancels out and we get:
P/L = P/L_1 + P/L_2 = 0 - 0 =
So in general, we could say
P/L = final value - (sum of contributions)
If we wanted to make things complicated, we could try to include inflation. The two weeks from now is worth less than half the 0 now. Or the 0 at the end is worth less than twice the 0 now. But it can be difficult to calculate inflation for periods less than a month, as they don't usually report it more often than that. It's more something that you would do when calculating an annual number or a number for multiple years.
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