--- title: "Balance vs Equity in Trading - Get Funded Now" description: "Balance is the account's value from closed trades; equity adds open profit and loss. How they differ, how margin fits in, and which one limits measure." url: "https://getfundednow.com/learn/balance-vs-equity" language: "en" last_modified: "2026-09-22" publisher: "Get Funded Now (getfundednow.com)" translations: es: "https://getfundednow.com/es/learn/balance-vs-equity" pt-BR: "https://getfundednow.com/pt-br/learn/balance-vs-equity" fr: "https://getfundednow.com/fr/learn/balance-vs-equity" it: "https://getfundednow.com/it/learn/balance-vs-equity" de: "https://getfundednow.com/de/learn/balance-vs-equity" disclosure: "All trading at Get Funded Now is simulated. 'Funded' means a simulated or virtual account; GFN is not a broker and does not hold client funds." --- Risk and performance # Balance vs equity: closed results and live ones. In trading, the balance is the account's value from closed trades only: deposits plus realised profit and loss. Equity is the balance plus the unrealised profit or loss on positions still open, so it moves with every price change. When no positions are open the two are equal. Most risk limits, including margin calls, watch equity. [All trading lessons](https://getfundednow.com/learn) · [Read the trading rules →](https://getfundednow.com/rules) ## The numbers on an account A trading account usually shows four related figures. **Balance, equity and margin** | Figure | What it is | Changes when | | --- | --- | --- | | Balance | Starting value plus realised profit and loss | A position is closed, or costs are charged | | Equity | Balance plus open profit and loss | Price moves on any open position | | Used margin | The deposit held for open positions | Positions are opened or closed | | Free margin | Equity minus used margin | Price moves, or positions change | ## Why limits watch equity The balance lags reality: a position losing heavily does not touch it until closed. Equity shows what the account would be worth if everything were closed now. That is why margin calls and most prop firm loss limits are measured on equity - see [equity-based drawdown](https://getfundednow.com/glossary/equity-based-drawdown) - and why a trade can breach a limit while still open. The difference between the two is exactly the open [PnL](https://getfundednow.com/learn/what-is-pnl). ## Balance highs, equity highs and trailing limits Trailing limits need a peak to trail from. Some use the highest balance, updated only when trades close; others use the highest equity, which includes open profit at its best. The [intraday trailing drawdown](https://getfundednow.com/learn/intraday-trailing-drawdown) page covers the difference, which can be large for a trader who lets open profits reverse. Step by step ## How to identify it Read both numbers before every new trade. 1. Check the balance: what closed trades have produced. 2. Check the equity: what the account is worth right now. 3. Note the gap - that is the open profit or loss. 4. Measure your remaining room to any limit from equity, not balance. Worked example ## The concept, walked through ### Balance and equity diverging, described An illustrative sequence on a $100,000 simulated account. It is not a record of real trades. 1. 1. Start Balance and equity are both $100,000. 2. 2. Open loss A position is $2,500 down. Balance is unchanged; equity is $97,500. 3. 3. Closed The trader closes it. Balance falls to $97,500 and matches equity again. The loss counted against equity from the moment it appeared. Closing the trade only moved it into the balance. Common mistakes ## Where traders go wrong ### Watching only the balance An account can be close to a limit while its balance looks untouched. ### Holding losers to protect the balance Equity already reflects the loss; waiting does not undo it. ### Forgetting costs Commission and swap reduce the balance even on trades that break even on price. Limitations ## What it cannot tell you No chart concept predicts price. These are the limits worth keeping in view. - Labels differ between trading dashboards; check how yours defines each figure. - Equity is a mark-to-market value and can move sharply in fast markets or at the weekly open. In an evaluation ## Using it on a simulated account GFN's daily loss limit counts closed and floating losses together - 3% on Instant and 5% on 1 Step and 2 Step - so it is an equity-based limit. On a $100,000 account it is $3,000 on Instant or $5,000 on 1 Step and 2 Step, and an open position can reach it before it is closed. - [What is the daily loss limit?](https://getfundednow.com/rules/daily-loss-limit) - Trading rule - Measured on closed and floating losses together - 3% on Instant and 5% on 1 Step and 2 Step. - [What is maximum drawdown?](https://getfundednow.com/rules/max-drawdown) - Trading rule - The overall floor, measured on equity. - [What is trailing drawdown?](https://getfundednow.com/rules/trailing-drawdown) - Trading rule - How trailing limits follow equity highs. Questions ## Asked about this concept The account's value from closed trades only: the starting amount plus realised profit and loss, minus costs. It does not change while positions are open. Equity is the balance plus the open profit or loss on positions still held. With no open positions, the two are the same. Keep learning ## Related lessons - [What Is PnL? Profit and Loss in Trading](https://getfundednow.com/learn/what-is-pnl) - Risk and performance - What PnL means, the difference between realised and open profit and loss, and how costs turn a gross result into the number that counts. - [Intraday Trailing Drawdown, Explained](https://getfundednow.com/learn/intraday-trailing-drawdown) - Risk and performance - A trailing loss limit that moves up with your highest equity during the day, including unrealised profit - and why that makes giving back gains costly. - [Notional Value in Trading, Explained](https://getfundednow.com/learn/notional-value) - Risk and performance - The full market value behind a leveraged position - how it is calculated, how it differs from margin, and what notional volume and notional limits measure. Sources ## What this page relied on 1. [Unrealized gain or loss](https://www.investor.gov/introduction-investing/investing-basics/glossary/unrealized-gain-or-loss) - US Securities and Exchange Commission, Investor.gov. Retrieved 23 September 2026. The definition of an unrealised gain or loss on a position still held. 2. [Realized gain or loss](https://www.investor.gov/introduction-investing/investing-basics/glossary/realized-gain-or-loss) - US Securities and Exchange Commission, Investor.gov. Retrieved 23 September 2026. The definition of a realised gain or loss once a position is closed. Educational content only, not investment advice or a recommendation to trade. Chart concepts describe what price has done; none of them predicts what it will do, and trading any strategy can lose money. Get Funded Now accounts are simulated and trade virtual funds. Last reviewed 22 September 2026. Ready when you are ## Your capital stays yours. The risk is ours. One evaluation fee, no time limits and up to 90% of simulated profits. Pick an account size and your credentials arrive by email within minutes. [Start your challenge →](https://getfundednow.com/challenges) · [Read the rules](https://getfundednow.com/faq) No subscriptions or hidden fees Payouts every 14 days $400,000 max total allocation --- Source: https://getfundednow.com/learn/balance-vs-equity Facts about Get Funded Now in one file: https://getfundednow.com/llms.txt