🧱 Basics·beginner

Balance

The total cash in your trading account, not counting any open-trade P&L.

Balance is the snapshot of how much cash you have in your broker account if every open trade was closed right now at its entry price — basically, what you deposited minus any realized (closed) losses and plus any realized wins. Balance is static between trades. It doesn't move while you have open positions. It only updates the moment you close a trade. The sibling concept is equity — that's balance plus or minus your current open P&L. Balance is "realized," equity is "real-time." Confusing the two is the #1 source of "wait, where did my money go?" moments for new traders.

Real trade example

A trader with $5,000 balance and an open trade down $2,000 technically still has $5,000 balance but only $3,000 equity. Margin call could hit while balance "looks fine."

Related terms

Equity

beginner

Balance plus or minus your current floating P&L — what you'd have if you closed every trade right now.

Margin

beginner

The amount of your own money locked up as collateral to open and hold a leveraged position.

Free Margin

beginner

The portion of your account equity that's NOT being used as margin for open trades — what's available to open new positions.

Drawdown

intermediate

The peak-to-trough drop in your account equity — a measure of how bad your worst losing streak got.

P&L (Profit and Loss)

beginner

The total profit or loss on your trades — the scorecard for your trading performance.

Base Currency

beginner

The first currency in a forex pair — the one you're buying or selling, priced in units of the second currency.

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