What is Equity? - Definition & Explanation

Definition

The total value of a trading account including unrealized profits and losses.

Equity Explained

Equity is your account balance plus or minus unrealized profits and losses from open positions. It represents the true current value of your trading account.

Related Terms

Drawdown

The peak-to-trough decline in account equity, expressed as a percentage.

Equity - Frequently Asked Questions

Balance is your closed-trades value. Equity includes unrealized P/L from open trades.

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