What is Equity in Trading?

Your equity is the real value of your account if you were to close all your positions right now. It is calculated as:

Equity = Balance + Unrealized Gains/Losses

This allows you to know how much you actually have available. In margin trading or futures, monitoring your equity is vital to avoid liquidations.

Quick tips:

Do not confuse equity with balance.

Always check your equity before opening new trades.

Use equity as a risk thermometer.

Keyword of the day: Equity = Net value of your account in real time.

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