Balance in forex trading refers to the total amount of money in your trading account, including only closed trades. It does not include unrealized profits or losses from open positions.
Balance vs. Equity
| Balance | Equity | |
|---|---|---|
| Open trades | ❌ Not included | ✅ Included |
| Closed trades | ✅ Included | ✅ Included |
| Deposits | ✅ Included | ✅ Included |
| Withdrawals | ✅ Deducted | ✅ Deducted |
Formula: Equity = Balance + Floating P&L
Example
- Account balance: $10,000
- Open trade profit: +$500
- Equity = $10,500
- Balance = $10,000 (unchanged until trade closes)
Key Points
- Balance only changes when trades close, or when you deposit/withdraw
- Margin calls are based on equity, not balance
- Monitor both balance and equity for a complete account picture