Definition
FIFO stands for first in, first out. In trading, it means the oldest open lot of an asset is treated as the first lot to be closed when a sell occurs.
In practice
FIFO affects cost basis, realized PnL, and trade review because each buy can carry a different entry price and open time.
You see FIFO in portfolio accounting and trade review when repeated buys of the same asset are tracked as separate lots.
Related reading
See the term in a practice flow.
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