Trading Pair PNLs or: How I Learned to Stop Worrying and Love the Difference

Intro

Congrats, Anon. You bought a token, came back, checked the charts, and it went up! But wait, when you load Trojan and check your SOL PNL, it’s red. What happened? Welcome to the wonderful world of “trading pairs”. 

First things first. You made a gain. Take a moment and enjoy the sensation before moving to the next (negative) logical thought. You might have made more if you had just stayed in SOL.

You’re confused. Your trencher buds are all saying “It’s just SOL PNL dude.” “SOL cranked more than your token!” “SOL’s running right now, bro.”

You don’t understand, but that’s okay. Everyone has to learn at some point and that’s what today’s article is about. Let’s break it down.

What the Heck is a Trading Pair?

A crypto trading pair is essentially two assets you're swapping for each other. Say you’re using SOL to buy COOLCOIN in a COOLCOIN/SOL pair. Each token has its own dollar value that constantly changes, so the values of the two can, and will, change independently of one another. 

So instead of just two assets, SOL and COOLCOIN, really we have three. SOL, COOLCOIN, and USD. And each of them has a value relative to the other if you wanted to trade them:

• # of SOL per 1 USD

• # of COOLCOIN per 1 SOL

• # of COOLCOIN per 1 USD
  
  

And each of those could be flipped the other way around as well with basic math. So if it’s 200 USD per 1 SOL, it’s 0.005 SOL per 1 USD (i.e. 1/200th of a SOL).   

Starting from Scratch

OK. Now that the basic idea of a pair is there, let’s circle back a little. 

The native cryptocurrency of the Solana blockchain, SOL is fast and cheap for trading. It’s also needed as the "gas" you pay to transact in that ecosystem. But more than that, SOL becomes your trading capital for buying Solana-based tokens. You're not “holding” dollars anymore; you're “holding” SOL and are therefore now exposed to its price swings relative to USD.

How did you get your SOL to begin with? It didn’t fall off the Solana tree (I wish). You used your fiat on-ramp of choice, sent USD from your bank, and swapped it for SOL. For the sake of example, let’s say you spent $1,000 and SOL was priced at $200 USD at the time, so you got 5 SOL (ignoring fees for simplicity).

From here, you spot a promising token, like the aforementioned COOLCOIN, trading at $1 each. You swap your stack of SOL for COOLCOIN. This is effectively a bet that the price of COOLCOIN will rise against the dollar faster than SOL will.

The Magic (and Madness) of Relative Performance

But remember, you measured your original entry in USD, so if COOLCOIN goes up, and you check your PNL later, you’re tracing back to that FIAT starting line. You want to look at it because your USD PNL feels like the "true" gain. It's what you can cash out to buy pizza with. But it’s only half the story. 

PNL, or Profit and Loss, is the way Trojan shows how your trade performed. But there are two entries. One is in USD and the other is in SOL. 

The “difference” comes when these two metrics don’t agree, like when your USD PNL is green, but your SOL PNL is red.

Let’s break it down with your trade. You spent 5 SOL to buy 1,000 COOLCOIN at 0.005 SOL each (we are assuming this trade was made immediately after buying your SOL with USD). 

Time passes…SOL’s price jumped to $300, and COOLCOIN also went up and it hit $1.30. Here comes the math. Brace yourself. 

• USD PNL: Your 1,000 COOLCOIN is now worth 1,000 × $1.30 = $1,300. You started with $1,000 worth of SOL, so you’re up $300. Green!
  
  

• SOL PNL: Your 1,000 COOLCOIN is worth $1,200, but SOL is now $300 each. Divide $1,200 by $300/SOL, and you get 4 SOL—less than your original 5 SOL. Red!
  
  

This difference happens because SOL outpaced COOLCOIN. While COOLCOIN gained value in USD, SOL’s price grew even faster, so your trade is worth fewer SOL than you started with. 

Here’s a quick visual to make it crystal clear:

Why This Matters (and Why it Doesn’t)

The USD vs. SOL PNL difference shines a light on “opportunity cost” (we’ll cover this in another blog) by showing how your trade stacks up against simply holding SOL. 

In essence, it gives you a fuller view of the trading pair's two-sided nature, helping you spot whether your token is truly outperforming or just riding SOL’s wake.

Trojan displays both PNLs for exactly this reason: to let you evaluate your position from multiple angles. 

But there is good news. It doesn't always matter that much.

A green USD PNL is often all you need. Disparities are usually noticed during big market shifts, like in our example when SOL blasts up suddenly. But price gaps are usually not so rapidly extreme. The differences can be subtle but, when they add up over a long period, jarring.

It’s worth noting that things can also swing the other way too, (i.e. where your token outpaces SOL).  It takes some time to wrap your head around this. But once you get it, you’ll get it. 

Embrace the Duality

There you have it, anon. Trading pairs aren't out to get you; they're just showing the full picture. Next time you see green USD and red SOL, enjoy the win, before you ask: "Could I have won bigger?"

No one is born knowing this stuff. Your trench bros probably learned it the hard way, after a few painful trades. But Trojan wants to help you avoid that route, and instead pick up the skills without the pain.

If you find yourself still confused after reading this and giving it a go, you can always find assistance in our 24/7 Help Chat.

So go forth, trade wisely with Trojan, and may your PNLs always trend green, whichever way you measure 'em.