Trading account balance

Most traders size their risk from this number. If you read it wrong, you can trade too big. Your balance only moves in steps, when a trade closes or when money goes in or out. Your open trades can be doing much worse than the balance shows.

What changes your balance and what leaves it alone

Your balance follows realized results only. Realized means the trade is closed and the gain or loss is locked in. The table compares it with equity, which is your balance plus or minus the floating profit or loss on open trades.

Swap can also be positive. In that case, both columns go up instead of down, with the same timing.

Rows three and four show a common misread. Many traders feel that closing a losing trade is what costs them money, so they keep losers open. Look at equity in that row: the money was already gone before you closed. Closing only made official a loss you already had.

Closing a losing trade: equity has already fallen $150, and the balance only catches up at the close

A winning trade works the other way round. Open profit shows up in equity, but it isn't in your balance until you close, so it can shrink before you bank it.

Illustrative winning trade: equity runs $120 above the balance, but only $40 is banked at the close

The automated-trading backtest at the top of this page shows the same gap in a real report. It ran on EURUSD on the 15-minute chart from 2026.06.25 to 2026.09.25. That is a past result, not a prediction. The maximum balance drawdown was 5.06 (0.05%) in the account currency. The maximum equity drawdown was 20.22 (0.20%), also in the account currency, and about four times larger. The balance never recorded how deep the open trades went.

Free margin is your equity minus the margin held for open trades. It is the money you can still use to open new positions. Opening a trade locks up margin, but that margin is never taken out of your balance. Because free margin comes from equity, it shrinks as open trades lose, even while the balance stays the same.

Margin calls and stop-out are triggered by equity, not balance. Your broker tracks your margin level, which is equity ÷ used margin, usually shown as a percentage. If it falls to your broker's margin call level, you get a warning. If it keeps falling to the stop-out level, the broker starts closing your trades for you. These levels differ from broker to broker, so look up yours. A healthy balance does not protect you from a stop-out.

Decision rule: before you add a trade, check your margin level, not your balance. If it is falling toward your broker's margin call level, reduce or close positions instead of opening new ones.

Sizing a trade from your balance, step by step

The numbers below are an illustrative example. Your balance is $10,000 and you have no open trades. You risk 1% per trade and set a 25-pip stop on EURUSD. On a USD-quoted pair, one standard lot (100,000 units) is worth $10 per pip.

Position size from a $10,000 balance, the balance after a stopped-out trade, and risk when equity is lower

Risk in money$10,000 × 1%= $100

Lots for a 25-pip stop$100 ÷ (25 × $10)= 0.40

Balance after the loss$10,000 − $100= $9,900

Next trade's 1% risk$9,900 × 1%= $99

Risk from equity ($9,600)$9,600 × 1%= $96

Risk with trades open: size from the low$96

Because your risk is a percentage of the balance, it shrinks after losses and grows after wins without you doing anything. Use this rule when other trades are still open: size from whichever is lower, balance or equity. If equity is $9,600 while your balance still says $10,000, your 1% risk is $96, not $100.

How to trace each change in your balance

Your account history or statement lists each deposit, withdrawal, closed trade, commission and swap, so you can trace every change in the balance. On a live account, the balance changes only through closed trades, costs, deposits and withdrawals.

Checks before you place the next trade

• Account currency: your balance is in your account currency. If that isn't USD, convert the pip value before you size a trade.
• Balance vs equity: compare the two numbers before every order; if they differ, use the lower one.
• Bonus or credit: some accounts show promotional credit on its own line. Leave it out of your risk sums, because it isn't your money.
• After a deposit or withdrawal: work out your 1% figure again. Yesterday's lot size no longer matches 1%.
• Costs: add up last month's commissions and swaps from your history. If your closed-trade profit before costs is smaller than that total, your balance falls even when you win more trades than you lose.

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