Definition

Equity

Equity is an account's balance adjusted for the profit or loss on open positions (and any swap or fees) — the account's live value right now.

Most funded-account and broker risk rules — daily loss, trailing drawdown, margin level — are measured on equity, which is why open-trade losses can trigger them before anything is closed.

Related terms

Floating (unrealised) P/L — Floating P/L is the profit or loss on open positions that has not been realised yet — it moves with price and is added to balance to give equity.
Margin level — Margin level is the percentage (equity ÷ used margin × 100) a broker uses to decide when an account is too stretched to keep its positions open.
Daily loss limit (maximum daily loss) — A daily loss limit is a cap on how much a trading account may lose within a single trading day, usually measured on equity from a fixed daily starting point.

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