Equity

Equity is your real-time account value, calculated as balance plus any floating profit or loss on open positions. If your balance is $10,000 and you currently have $500 in unrealized profits, your equity is $10,500. Equity fluctuates constantly with open positions and determines your margin level and available free margin. It becomes your new balance when you close all positions.

The distinction between balance and equity matters because they behave differently. Balance is static, only changing when a trade closes or cash moves in or out of the account. Equity is dynamic, updating tick by tick as prices move. A trader might have a healthy balance of $10,000 but an equity of $7,000 if current open positions are underwater by $3,000. That gap is a real risk that only shows in the equity number, which is why brokers use equity (not balance) to compute margin level.

For example, if your balance is $10,000 and you open 1 standard lot of EUR/USD at 1.0850, your initial equity is also $10,000 (no floating P&L yet). If the price rises 30 pips to 1.0880, floating profit is $300, so equity rises to $10,300. If you then close the trade, $300 moves from unrealized equity into realized balance, making your new balance $10,300. Losses work the same way in reverse.

In copy trading, equity is the baseline from which position sizing is calculated. SteadyFlowFX adjusts copied trade sizes based on the subscriber's current equity, not just their starting balance. The verified Myfxbook 34.2 percent max drawdown is an equity drawdown, meaning it captures the worst floating loss, not just the worst closed-trade loss. Watching equity rather than balance gives subscribers the honest picture of how the strategy is performing at any given moment.