Equity

Equity is what your account would be worth if you closed everything at the current price. It moves with every tick while you have open trades, whereas the balance only changes when a trade is closed or money is deposited, withdrawn or charged.

• Equity = balance + floating profit − floating loss
• Swaps and commissions already charged are in the balance; costs not yet charged are not.

Brokers use equity, not balance, for every margin calculation. Free margin is equity minus the margin in use, and the margin level is equity divided by used margin, expressed as a percentage.

Example

Illustrative figures: you deposit $5,000 and open one mini lot each of EUR/USD and GBP/USD. A few hours later the EUR/USD trade shows +$120 and the GBP/USD trade shows −$420.

• Balance: $5,000 (nothing has been closed)
• Floating profit or loss: +120 − 420 = −$300
• Equity: $4,700

If you now close the losing trade, the balance falls to $4,580 and equity stays at $4,700, because the remaining +$120 is still floating. Closing a trade does not change equity at that moment; it only moves money from "floating" into "balance".

Practical note

A balance that looks healthy can hide a large open loss. When equity falls far enough relative to used margin, the broker can issue a margin call and then close positions automatically, even though the balance figure has not moved. Watching equity, not balance, is the habit that matters. The margin calculator shows how much margin a trade will tie up, and our guide to margin calls and stop-outs walks through the sequence.