Balance (vs equity)

The balance is the settled cash in your account. It changes only when something is realised or charged:

• deposits and withdrawals
• the profit or loss of a trade when it is closed
• commissions, swaps and other fees when they are booked

Equity is the balance adjusted for the profit or loss on open positions at current prices. With no open trades, balance and equity are the same number.

Example

Illustrative figures for one day:

• Start: balance $2,000, no positions, equity $2,000
• Open a long trade on EUR/USD; it is 25 pips up on 0.2 lots (about $2 a pip): balance $2,000, equity $2,050
• Overnight a swap of −$1.20 is charged: balance $1,998.80, equity $2,048.80 if the price has not moved
• Close the trade at +25 pips: balance $2,048.80, equity $2,048.80

Why the difference matters

Margin calls, stop-outs and free margin are all calculated from equity. A trader who looks only at the balance can believe the account is safe while open losses are eating the equity underneath it. The opposite also applies: a large floating profit is not money in the balance until the trade is closed, and it can disappear before then.

Some platforms label these fields slightly differently, but MetaTrader, cTrader and most web platforms show both. Our guide to margin calls and stop-outs shows how equity, used margin and the margin level interact.