a) If you do NOT have any open positions, then your Equity is the same as your Balance. b) If you have open positions, your Equity is the sum of your account balance and your account’s floating (unrealized) P/L.
From above photo, I see there is +19.81 for Unrealised P&L, so it seems there is an open position, so to calculate Equity I apply the b) formula:
When you have an open trade, the broker will demand a certain level of margin to “finance” or “cover” that trade. The margin for an open trade is not free to you to use to cover a new trade.
For example, if you have put $1000 into an account and you wish to open some positions, you will find that a position of a certain size on a major pair requires $400 of margin. Margin is greater on minor pairs than major pairs, and much greater on exotic pairs. So with your $1000 you could only have open 2 positions of that size on major pairs. You could only open another major pair position if you reduced its size.
Hello.
As far as I know, equity represents the amount of money that you would have if you closed all of your trades at the current market price. On the other hand, Net Equity refers to the total value of your account, including both your balance and any unrealized profit or loss, minus any fees or charges that have been incurred. It is the amount of money that you would have if you closed all of your trades at the current market price and paid any associated fees or charges.
I hope it is correct.
Hi there! basically “Balance” means all the money in your trading account including both your profits and losses from your trades. And when we say “Available to trade”, we’re talking about how much of your balance is actually available for you to use in opening new positions or trades, considering any margin requirements or open positions you might have. So sometimes, the “Available to trade” amount might be lower than your total “Balance” in the account.
Ok, Let us start with the labels on the terminal on the photo referred to. Available to trade… that would be the margin left for you to trade. This actually represent the amount of money you can use at will. Net equity …That is the total amount of money you would have if you close all your current positions (trades) Cash(USD)… That is the account balance. The money you had before opening you currently open trades. Total margin…That is the money you used to open the trade. Margin Indicator That is just a fancy way of indicating how safe your account is in relation to currently running positions. (Equity divided by Total margin) multiply by 100
Back to your question. You did apply the right formula but you used the incorrect figures hence wrong answer.
Your balance is the column labeled Cash(USD)
You can only have authority and power over your equity when you have no positions running. Once you have open trades, the market takes over the authority. It will fluctuate as per your unrealized P/L.
Interesting point of view regarding the fact that the two ( “Available to trade”and “Balance”), which I initially thought were the same, are actually a bit different.
