Glossary
Balance
The settled cash in your account — the total of all closed (realised) profits and losses.
Balance, explained
Balance is your account's realised value: the deposits you have made adjusted by every closed trade's profit or loss. It does not move while a trade is open — only when that trade is closed does its result fold into the balance.
Because open positions are not reflected, balance can look reassuring even while open trades are bleeding. That is why equity, which includes floating P/L, is the better gauge of present account health, while balance is best understood as a historical, settled figure.
Balance is the right number for some purposes and the wrong one for others. It is what you use to measure realised performance and to calculate withdrawals, but it is misleading for judging live risk, because it ignores everything happening on the screen right now.
The relationship is simple: equity equals balance plus the sum of all open-trade profit and loss, and the two converge the moment you have no positions open. A profit you see in the balance is yours; a profit you see only in equity is still at the market's mercy until you close.
On the desk we report realised results against balance because it is the honest, booked record, but we always manage open risk against equity. Confusing the two — sizing or celebrating off a balance that hides floating losses — is a classic way to drift into trouble.
Frequently asked questions
- Does my balance change while a trade is open?
- No. Balance only updates when a trade is closed and its result is realised. While positions are open, their floating profit or loss shows up in equity, not balance.
- Should I judge my account by balance or equity?
- Use balance for settled, historical performance and withdrawals, but judge live risk by equity, since equity includes the floating profit and loss of open trades that balance ignores.
Related terms
Equity
Your account balance adjusted for the live profit or loss of all open positions.
ReadDrawdown
The peak-to-trough decline in your account — how far you fall from a high before making a new one.
ReadMargin
The deposit a broker holds as collateral to open and maintain a leveraged position.
ReadSwap
The interest charged or earned for holding a forex position open overnight.
Read
Put it into practice
Education modules
More terms in the glossary.
Vocabulary is the easy part. See how the desk turns these concepts into structured trades with defined risk on every position.