In trading, Equity represents the real-time value of your trading account, including any profits or losses from open positions.
In simple terms, equity shows how much your account is worth right now.
How is Equity calculated?
Equity = Balance ± Floating Profit/Loss
If you have no open trades, your equity is equal to your balance.
When trades are open, equity changes as the market moves.
What is the difference between Balance and Equity?
Balance is the amount of money in your account after all closed trades
Equity is your balance plus or minus any floating profit or loss from open trades
Because of this, your equity changes constantly while you have open positions.
Why is Equity important?
Equity is used to calculate your margin level and helps determine margin calls and stop outs.