Trading knowledge libraryWhat Is Balance, Equity and Free MarginMarket Basics
Market Basics
What Is Balance, Equity and Free Margin
Balance, equity, margin and free margin are the four numbers on the strip under the Trade tab, and only the first is what most people think an account is worth. This paper shows you what each one counts, how they moved through one real day with one trade open, what happens on the day the free margin goes below zero, and which of the four move with every tick.
Under the Trade tab on MetaTrader there is a strip with four numbers, and most people read only the first. Balance is what is banked: every closed trade added up, nothing else. Equity is what the account is worth right now: the balance plus whatever the open trades are worth this second. Margin is the part of the equity the broker holds back while a trade is open — at one-to-one-hundred leverage, one lot of the euro at 1.15872 holds back $1,159. Free margin is the equity minus the margin: the room left for the trade to move against you, and for anything else to be opened. On a five-thousand-dollar account the moment the 3 September 2026 trade opens, the four read 5,000, 5,000, 1,159 and 3,841.
One real day on the strip
Here is the strip at three moments of that day, ignoring the spread. A pip is the fourth decimal place, $10 at one lot. At 03:00 the price had dipped to 1.15834 and the trade was $38 down: the equity read 4,962 and the free margin 3,803, while the balance still said 5,000 and the margin still said 1,159. At 19:00 the price was 1.16411 and the trade $539 up: equity 5,539, free margin 4,380, balance and margin unchanged. At the close the trade was closed at 1.16259 for $387. Only then did the balance move, to 5,387; the margin went back to zero, and the equity and the free margin became the same number as the balance.
