Equity
The total value of a trading account including the balance plus or minus any unrealized profits or losses.
Equity is your account's current total value: balance plus or minus floating profit or loss on open positions. It moves in real time with the market.
Equity represents the current total value of your trading account. It equals your account balance plus or minus any floating (unrealized) profits or losses from open positions. Equity fluctuates in real-time as markets move.
How It Works
- Equity = Balance + Floating P/L
- Balance: $10,000, Open profit: $500 → Equity: $10,500
- Balance: $10,000, Open loss: -$300 → Equity: $9,700
- Used to calculate margin level
Trading Tips
Monitor equity, not just balance
Margin level = (Equity / Used Margin) × 100%
Low equity triggers margin calls
Equity Example
Say your balance reads $5,000 with two open trades floating plus $300. Your equity is $5,300, and that is the number margin level divides by. Close both winners and balance catches up. Let them reverse and equity leads the fall first.
How Traders Use Equity
Watch equity, not balance, during open trades. Margin calls trigger on equity, and floating losses spend real risk before they ever touch the balance line.
Related Terms
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