Account Balance

What is account balance?

Account balance is the amount of settled money sitting in a trading account, based only on deposits, withdrawals, and the results of closed trades. It does not move with the market between closed trades — it only changes the moment a deposit clears, a withdrawal is processed, or a position is closed and its realized profit or loss settles into the account.

This is the key difference from equity, which is balance plus the floating, unrealized profit or loss of any currently open trades. If you have no open positions, balance and equity are identical.

A worked example

You deposit $2,000 into a trading account — your balance is $2,000. You open a trade and close it later for a realized profit of $150; your balance updates to $2,150. You then open a second trade that is currently showing a $80 floating loss. Your balance is still $2,150 (unaffected by the open trade), but your equity is $2,070 ($2,150 − $80) until that second trade is closed one way or another.

Why account balance matters

Balance is the reference point most trading platforms use for reporting historical performance, because it only reflects locked-in, closed-trade results rather than the swings of trades still in play. It’s also the number typically used when calculating risk per trade as a fixed percentage — most risk-management rules (“never risk more than 1–2% per trade”) are expressed against balance or equity, whichever a trader’s plan specifies. Watching both balance and equity together gives a fuller picture: balance shows what you’ve actually banked, while equity shows what the account is worth right now if everything were closed out.

Trading balances can decrease as well as increase, and leveraged trading carries risk of loss. This article is educational and not financial advice.