What is the balance and equity in forex trading?

What is Balance?

The Balance represents the fixed capital currently sitting in your trading account. For instance, depositing $10,000 via the GreatBless platform sets your initial balance to $10,000.

• This figure remains static and only updates when a trade is permanently closed or a financial transaction (deposit/withdrawal) occurs.
• Floating profits or losses from active positions have no impact on your balance.

What is Equity?

The Equity represents the real-time value of your trading account. It includes your actual Balance plus any floating profit or loss from open trades. For example, if your balance is $10,000 and your open trades are currently up $500, your equity will be $10,500.

• This figure fluctuates constantly with market prices as long as you have active positions.
• If you have no open trades, your Equity is exactly equal to your Balance.

Equity = Balance + Profit/Loss

Example:

• The initail balance is $35 074.60
• The trader places an order Buy XAUUSD 0.5 lots. Now the balance is $35 074.60
• The unreadlized loss is +$3.2. The equity now is $35 074.60 + $3.2 = $35 077.80