How does the IRS calculate stock capital gains for the year? Is it NET GAINS - NET LOSS = Profit/loss ? Or do they tax each individual capital gain?

Your facts are limited, however, as general commentary:

• If you have not made a Section 475(f) election (many traders do make the election), then you will just input all the trades on form 8949 which will then transfer to Schedule D.  Take a look at the attached link and follow how the form works.  There is a netting process and the end result is based on the ST and LT gains and losses.
• https://www.irs.gov/pub/irs-pdf/f1040sd.pdf
• I have also attached a link to Publication 550 which has a brief discussion on trader status (chapter 4).  Keep in mind, that this election needs to be made in the year that you want that status; example, you needed to make that election by July 15, 2019 (due to the extension of the original tax due date) in order to be eligible for the 2020 tax year.  You will need to make that election (based on current rules) by April 15, 2021 to be eligible for trader status on your 2021 tax return.
• https://www.irs.gov/pub/irs-pdf/p550.pdf

This is a complicated area with a lot of tracking required.

For stock sales, you calculate long term and short term separately To calculate your taxable gains (or losses), you take the total of all your sales proceeds, and subtract the total cost basis for all of those sales.  You do that for both long term and short term gain/loss.  If you are a day trader, all of your gains will be short term.  If you have a net short term gain, it is taxed as ordinary income.  They do not tax individual trades.  All your individual trades are netting for a single long term gain/loss amount, and a single short term gain/loss amount.  If one is a gain and the other a loss, they will net against each other.