What are the Balance, Equity, Margin, Free Margin and Margin Level formulas?
Posted by on 13 June 2014 04:12 PM
Balance shows the amount of deposited money in your trading account. The profit/loss of your orders will be added or deducted to/from your trading account balance when you close your orders.
When you have open orders in your trading account, the Balance will not change and it will stay fixed but the Equity will be floated according to the profit/loss of your current orders.
Please note that the Fxglory bonus will be added to the Equity. So, the Equity formula is like the following:
Margin is the amount of the money that is used to open a position or trade and it is calculated based on the leverage.
Volume is contract size * lot size
Free margin is the difference of your account equity and the open positions’ margin.
As long as you do not have any open orders in your trading account, your account equity and free margin are the same as your account balance.
Margin level shows the state of a trader’s trading account. It is the ratio of equity to margin.
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