PRACTICAL GUIDE
Explained concepts, worked cases and practice to test your understanding. Numerical examples are hypothetical; replace assumptions with your instrument specifications.
The essentials
Balance and equity can differ. Balance reflects booked activity; equity includes open positions and applicable adjustments. Free margin depends on equity and used margin under the account's rules.
Understand the mechanism, not just the definition
Balance reflects booked activity while equity incorporates the current economic state under account rules. Used margin is collateral and free margin is the remaining amount under that calculation. Credits and adjustments can add components. A positive balance does not ensure available capacity when open losses or committed margin exist.
Example and verification
Simplified example: balance 1,000, open loss 100 and used margin 200 produce equity 900 and free margin 700 without other adjustments. The ability to sustain exposure can change without closing a trade.
Worked case, step by step
Without credits or adjustments, a USD 500 balance and USD 30 open loss give USD 470 equity. With USD 100 used margin, free margin is USD 370 and margin level 470%. Further losses change equity even while balance remains 500. With zero used margin, that division is not a useful indicator or proof of no risk.
(470 / 100) × 100 = 470%What to verify when applying this
Find these fields in demo and observe opening and closing. Read warning and forced-close levels. Free margin is not a safe budget for new orders, and balance is not a guaranteed liquidation value.
Practice: verify it in your environment
Learn by observing the process and keeping its data. Complete this practice in demo or using documentation, without sending real orders or adding capital for the exercise. Record differences between the example and your account specifications.
- Observe balance, open results, equity and margin figures simultaneously in demo.
- Record contractual warning and liquidation thresholds rather than inferring them from one number.
Test your understanding
Try the question before revealing the answer. Justify the conclusion and its assumptions rather than memorizing a number.
Which changes with an open position’s price: balance or equity?
Reveal the explained answer
Equity reflects open results under applicable rules; balance changes when activity is booked.
Sources for further learning
Consult original documentation to check units, features and terms. Your account specifications take precedence over examples in this guide.
