Post
Topic
Board Trading Discussion
Re: I want to teach you how to make money. [Sticky Please]
by
Chucksta
on 13/10/2011, 11:16:40 UTC
Looks like I got the meaning of Balance and Equity round the wrong way. Which means the demo account is running at a loss. If that's the case, then...
Why is the graph going up ?
Why does myfxbook say profit of  $1035.34 and a Gain of +20.71% ?

Quote
Balance:

When you have no open position, balance is the amount of the money you have in your account. For example, when you have a $5000 account and you have no open position, your account balance is $5000.

Equity:

Equity is your account balance plus the floating profit/loss of your open positions:

Equity = Balance + Floating Profit/Loss

When you have no open position, and so no floating profit/loss, then your account equity and balance are the same.

And for example when you have some open positions and they are $1,500 in profit in total, then your account equity is your account balance plus $1,500. If your positions were $1,500 in loss, then your account equity would be your account balance minus $1,500.

Definition taken from: http://www.forexoma.com/leverage-margin-balance-equity-free-margin-and-margin-level-in-forex-trading/