Equity

Equity is the real-time value of your trading account. It equals your account balance plus or minus any unrealized profit or loss from open positions. If you deposited $5,000, have no open trades, your equity and balance are both $5,000. Open a trade that's currently up $300, and your equity becomes $5,300 while your balance stays at $5,000 until you close the trade.

Equity determines your margin level, which is the ratio of equity to used margin expressed as a percentage. If your equity drops too low relative to your margin requirements, you'll face a margin call. Most brokers start closing positions automatically when your margin level hits 20-50% (the specific level depends on the broker and regulation).

Watching equity fluctuate with every tick can be psychologically taxing, which is why many experienced traders avoid constantly checking open positions. The important number is your equity at the end of the day or week, viewed in the context of your overall strategy performance. Obsessing over intraday equity swings leads to emotional trading decisions.