Equity is the live value of your broker account at any given moment. It is your balanceBalanceThe cash sitting on your broker account, before the profit or loss of any open positions.Click the word to learn more plus the floating profitProfitThe gain or loss on a closed position, once spreads, commissions, and swaps are taken out.Click the word to learn more or lossLossThe realized loss on a closed position, or the sum of every losing position across a period.Click the word to learn more of every open positionPositionA single entry held on the broker account, with a direction, a size, and a current floating result.Click the word to learn more. The formula brokers use is straightforward: Equity = Balance + Floating P/L. When nothing is open, the two read the same number. The moment a position opens, they diverge.
A position moving in your favor pushes equity above balance. A position bleeding against you pulls equity below. The figure shifts with every tick, in real time, well before any position is closed. Balance, by contrast, sits still until positions settle.
This is the number brokers act on. Stop-out levels, marginMarginThe portion of your equity the broker sets aside as collateral while a position is open.Click the word to learn more calls, and forced closures all trigger off equity, not balance. Drop too far and the broker steps in to protect itself: warnings first, then closures starting with the worst position until used margin fits inside what is left.
Javlot applies your configured drawdownDrawdownThe drop in account equity from a peak to the trough that follows, expressed as a percent of the peak.Click the word to learn more cap the same way, against equity rather than balance. If the floating loss on open positions crosses your threshold, every position closes immediately. Waiting for positions to settle would mean acting on yesterday's number while today's is still falling.