Equity represents the real-time value of your trading account. It is the total amount of funds you would have if all open positions were closed immediately at current market prices.
Equity reflects your account’s real-time value, including any unrealized profit or loss from open positions.
How Is Equity Calculated?
The formula for equity is:
Equity = Account Balance ± Floating Profit/Loss
Account Balance: The amount of money in your account excluding any open trades
Floating Profit/Loss: The combined unrealized profit or loss from all open positions
Example
If your account balance is $1,000 and you have an open trade with an unrealized profit of $200, your equity would be:
$1,000 + $200 = $1,200
If the trade was showing an unrealized loss of $200, your equity would be:
$1,000 − $200 = $800
Equity changes in real time as market prices move and floating profit or loss fluctuates.
Why Is Equity Important?
Equity provides a real-time snapshot of your account’s health and determines:
How much free margin is available to open new trades
Whether your account is approaching a margin call or stop-out
Your overall exposure to floating gains or losses while trades remain open
Because equity updates continuously, it is one of the most important values to monitor during active trading.
Equity vs. Balance
Term | Definition |
Balance | The total amount in your account excluding open trades |
Equity | The real-time account value including floating profit or loss |
Balance remains static until trades are closed, while equity fluctuates with market movements.
Where Can I See My Equity?
You can find your equity displayed directly in your MT4/MT5 trading terminal, typically at the bottom of the Trade tab, alongside:
Balance
Margin
Free Margin
Margin Level (%)
These values update automatically in real time as prices change.
MT4 and MT5 show equity alongside other key account values for real-time monitoring.
Quick Tips for Managing Equity
Monitor your equity regularly, especially during volatile market conditions
Use stop-loss orders to manage floating losses and help preserve equity
Understand how leverage affects floating profit and loss, and therefore equity
Maintain sufficient equity to help avoid margin calls and stop-outs
Effective risk management helps protect equity during market fluctuations.
If you’d like help understanding how equity interacts with margin, leverage, or free margin, our team is happy to assist. Reach out via live chat or email at [email protected]. We’re here to support your trading journey.