Edward Lucas T_ Sanchez#99

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What is balance vs equity in forex?

Balance refers to the amount of money in a trading account excluding open positions. Equity, on the other hand, represents the real-time value of the account, including unrealized profits or losses from open trades. For example, if your balance is $1,000 and you have an open trade currently losing $50, your equity is $950. Conversely, if it is gaining $100, your equity is $1,100. Equity fluctuates constantly with market movements, while balance only updates once positions are closed. Understanding the difference is crucial for managing margin, avoiding stop-outs, and monitoring overall account health in real time.