Floating (unrealized) PnL is the profit or loss on open positions calculated at current market prices. It changes as the market moves until you close the trade, at which point it becomes realized.
Unrealized losses reduce account equity, potentially moving you closer to drawdown or margin call thresholds. Unrealized profits increase equity and free margin. Monitoring floating PnL helps manage risk, adjust stops, or close trades to avoid breaching Pipstone drawdown rules.