Баланс В Форекс

Currency trading offers a challenging and profitable opportunity for well-educated investors. However, it is also a risky market, and traders must always remain alert to their positions—after all, the success or failure is measured in terms of the profits and losses (P&L) on their trades.

It is important for traders to have a clear understanding of their P&L because it directly affects the margin balance they have in their trading account. If prices move against you, your margin balance reduces, and you will have less money available for trading.

Realized and Unrealized Profit and Loss

All your foreign exchange trades will be marked to market in real-time. The mark-to-market calculation shows the unrealized P&L in your trades. The term "unrealized," here, means that the trades are still open and can be closed by you any time.

The mark-to-market value is the value at which you can close your trade at that moment. If you have a long position, the mark-to-market calculation typically is the price at which you can sell. In the case of a short position, it is the price at which you can buy to close the position.

Until a position is closed, the P&L will remain unrealized. The profit or loss is realized (realized P&L) when you close out a trade position. In case of a profit, the margin balance is increased, and in case of a loss, it is decreased.

The total margin balance in your account will always be equal to the sum of the initial margin deposit, realized P&L and unrealized P&L. Since the unrealized P&L is marked to market, it keeps fluctuating, as the prices of your investments change constantly. Due to this, the margin balance also keeps changing constantly.

Calculating Profit and Loss

The actual calculation of profit and loss in a position is quite straightforward. To calculate the P&L of a position, what you need is the position size and the number of pips the price has moved. The actual profit or loss will be equal to the position size multiplied by the pip movement.

Let's look at an example:

Assume that you have a , GBP/USD position currently trading at If the prices move from GBP/USD to , then they jumped 15 pips. For a , GBP/USD position, the pips movement equates to $ (, x ).

To determine if it's a profit or loss, we need to know whether we were long or short for each trade.

Long position: In the case of a long position, if the prices move up, it will be a profit, and if the prices move down it will be a loss. In our earlier example, if the position is long GBP/USD, then it would be a $ profit. Alternatively, if the prices had moved down from GBP/USD to , then it will be a $ loss (, x ).

Short position: In the case of a short position, if the prices move up, it will be a loss, and if the prices move down it will be a profit. In the same example, if we had a short GBP/USD position and the prices moved up by 15 pips, it would be a loss of $ If the prices moved down by 20 pips, it would be a $ profit.

The following table summarizes the calculation of P&L:

Another aspect of the P&L is the currency in which it is denominated. In our example, the P&L was denominated in dollars. However, this may not always be the case.

In our example, the GBP/USD is quoted in terms of the number of USD per GBP. GBP is the base currency and USD is the quote currency. At a rate of GBP/USD , it costs USD to buy one GBP. So, if the price fluctuates, it will be a change in the dollar value. For a standard lot, each pip will be worth $10, and the profit and loss will be in USD. As a general rule, the P&L will be denominated in the quote currency, so if it's not in USD, you will have to convert it into USD for margin calculations.

Consider you have a , short position on USD/CHF. In this case, your P&L will be denominated in Swiss francs. The current rate is roughly For a standard lot, each pip will be worth CHF If the price has moved down by 10 pips to , it will be a profit of CHF To convert this P&L into USD, you will have to divide the P&L by the USD/CHF rate, i.e., CHF ÷ , which will be $

Once we have the P&L values, these can easily be used to calculate the margin balance available in the trading account. Margin calculations are typically in USD.

The Bottom Line

You will not have to perform these calculations manually, because all brokerage accounts automatically calculate the P&L for all your trades. However, it is important that you understand these calculations, as you will have to calculate your P&L and margin requirements while structuring your trade—even before you actually enter the trade.

Depending on how much leverage your trading account offers, you can calculate the margin required to hold a position. For example, if you have a leverage of , you will require a margin of $1, to open a standard lot position of , USD/CHF. Having a clear understanding of how much money is at stake in each trade will help you manage your risk effectively.

What is the difference between equity and balance in forex trading? While equity is a dynamic value that reflects the changes in open trades, balance is the amount of initial funds in your trading account. Every trader should be able to understand the difference between equity and balance as they are two crucial aspects of forex trading. Fundamentally, while they may reflect the same amount sometimes, equity and balance are two different amounts.

What is Balance? 

The account balance, or simply balance, is the amount of money in your forex account. If you deposit $ into your account, then the balance will be $ The balance is not affected by your trading activity until you close your open trades. Balance doesn’t include any profits or losses that are to be realized by open trades, only reflects profits/losses from closed positions. It changes only when you deposit funds or close a trading position. Swaps and rollover fees also affect your account balance if you keep a trade open overnight. 

The balance is displayed on the MT4 trading platform in the Terminal window under the Trade tab. 

What is Equity? 

Equity reflects the current value of the trading account and fluctuates according to changes in open trades. It is the account balance plus unrealized profits/losses associated with open trades. Equity also takes into consideration the trading costs like swaps and commissions. 

For example, if a trader goes long on the EUR/USD pair and the trade is showing a floating profit of $ Let’s assume the trading balance is $ In this case, the balance would be $ while equity will be displayed as $ This amount will keep fluctuating until the trade is closed, then it will be reflected automatically on the account balance.

Related Equity Terms: 

• Balance Equity: it refers to the total funds in the trading account when there are no open trades. 
• Floating Equity: it is the future or unrealized profits and losses that are not reflected on your balance yet. This amount fluctuates as long as the trades are open. 
• Negative Equity: it happens when unprofitable trading ends up wiping the trading account. Yes, some traders may end up with greater losses than their balance. But luckily, many forex brokers offer a negative balance protection feature that helps traders avoid such incidents.  

Equity and Margin 

The margin is the amount of capital required to open and maintain trading positions. It acts like collateral that is kept aside by the forex broker in order to keep a trade open and ensure that potential losses are covered. The margin is released back into the account balance once the trade is closed. 

Free margin is calculated by subtracting the margin from the equity, and it is the available margin to open new trades. When there is no sufficient free margin to keep trades open, the trader is notified to top up the account with funds. This is known as the margin call. 

The formula for calculating the margin level is:

Equity Vs Balance Explained 

The account balance is all the existing cash capital in your account. While equity is the balance +/- unrealized profits or losses. The balance and equity are equal in case you have no open trades. 

Equity is usually lower than balance when the open trades are losing or when profits are smaller than swap and paid a commission. On the other hand, equity is higher than balance when existing trades are winning, and profits are greater than trading costs. So, equity reflects the variable value of the trading account, a real-time reflection of current profits/losses.  Sometimes it is referred to as the floating account balance. 

How important is it to track your Trading Equity?

Let’s begin by exploring an alternative definition of equity, which refers to the combined value of a trader’s forex balance and any unrealized profits or losses related to their open trading positions. Equity is a reflection of the current status of all active trading positions.

When the margin is subtracted from equity, the remaining amount is referred to as free margin, which can be utilized to initiate new trades. However, if the free margin isn’t adequate to sustain existing trades, the broker will send a notification to the trader to top up their balance. Failure to respond to this margin call will result in the broker forcibly closing all open positions if the market moves unfavorably to the trader.

The notification from brokers for traders to add funds to their accounts is commonly known as Margin Call, while the situation where brokers forcibly close a trader’s positions due to insufficient funds is called Stop Out. Margin call and stop out limits differ among brokers and are typically detailed in the specifications for a forex account. As a trader, it is crucial to keep track of your equity and free margin levels to avoid losing your trading deposit.

Forex Balance Vs Equity: What Matters Most?

Equity and balance clearly differ significantly from one another. Additionally, we now understand which one requires closer attention. Due to the vital components, it contains, failing to pay attention to your equity will only hinder your ability to trade profitably. The balance, however, does not contain any items that are important enough to influence the results of deals.

The progress of your equity will depend on how well your trading strategy and risk management concepts work together with your money management. It will also have an impact on how many trades you can execute using the money indicated in your forex balance. Due to the fact that doing so will merely bring your account closer to the stop-out level, you cannot afford to trade recklessly or haphazardly. Your equity will no longer be able to sustain additional trading activities once it hits that point, and your FX balance will be zero.

How to Open Forex Account in a Few Steps

A forex account is used to trade foreign currencies. Typically, you open an account, deposit money and then buy and sell currency pairs. Opening a forex trading account is a quite simple process these days given the growth of online forex trading. It requires some paperwork and a few security steps, such as identity verification, and all can be done online. But first, you’ll have to choose your forex broker, select an account type, register then activates your account. 

You can choose between various account types, based on your trading strategy, experience, and capital designed for investment. Choices include Standard, Cent, or ECN trading accounts. Enjoy favorable trading conditions with Aximtrade; especially when it comes to margin and leverage levels. You can control your real-time risk exposure by monitoring your used and free margin as together make up your equity. 

AximTrade provides a leverage range that helps you choose your preferred risk level. The leverage ratio depends on your account type and equity, up to infinite leverage, and can be reduced by applying custom leverage.

Follow these steps to open a forex account with AximTrade:

1. To open a forex account, log in to your member account from AximTrade login, and click on the “+ Open Extra Account” button on the top right. 
2. Choose your preferred account type. You can choose between Standard, Cent, and ECN accounts. You can also choose a demo account if you’re a beginner. 
3. Select your account and press “Open”. 
4. Name the Account and create both trading and investor passwords for your account. The investor password should not be the same as the account password. Remember to use both uppercase and lowercase letters and use a combination of numbers and letters. Then click “Done”.
5. Now your account is ready for trading. You can find all your accounts in the “My Accounts” tab. 

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