Balance, equity, margin and margin level

At the top of the panel under the chart, right under its tabs, runs a line of six numbers: Balance, Equity, Margin, Free Margin, Margin Level and Open P/L. The line stays there on every tab, and the numbers move with every price. Two of them decide whether you can open a new trade, and one of them decides whether your open trades stay open.

Balance

The balance is the money on the account with no open positions counted. It changes when a position closes, by the profit or loss of that position, and when your Broker adds or removes money. Every change shows in the History tab: closed trades with their result, and balance operations labelled Deposit, Withdrawal, Credit or Correction.

Deposits and withdrawals happen on your Broker's side. eTrader holds no money and has no deposit or withdrawal screen, so a transfer you make on the firm's portal appears in the terminal once the firm books it.

Open P/L and equity

Open P/L is the profit or loss of every open position added together, at the current price. Equity is the balance plus the open P/L. It is what the account would be worth if you closed everything this second.

With no positions open, equity equals the balance. With a position running 250.00 USD in profit on a balance of 10,000.00 USD, equity is 10,250.00 USD. If the position turns to a loss of 400.00 USD, equity falls to 9,600.00 USD while the balance stays at 10,000.00 USD until you close.

Margin

Margin is the part of your equity locked up to hold the positions you have open. Each position needs its own share, worked out from its size, the instrument's contract size, the price and your leverage.

A worked example on a USD account at 1:100: one lot of EURUSD is 100,000 euros. At a price of 1.1000 that is 110,000.00 USD of exposure, and at 1:100 the margin is one hundredth of it, 1,100.00 USD. Half a lot needs 550.00 USD. The same lot at 1:50 would need 2,200.00 USD. Contract sizes vary by instrument and by Broker, so treat the order ticket as the source of truth rather than doing the sum yourself.

The ticket does it for you. Before you press Buy or Sell it shows Required Margin, what this order will lock up, and Free Margin After, what you will have left. Placing orders shows where they sit.

Your leverage is in Account Settings, from the account chip at the top right of the terminal, next to the account currency. Your Broker sets it. If the Broker caps it below the leverage chosen for the account, the line shows both, for example 1:100 capped from 1:500.

Free margin

Free Margin is equity minus margin: what is left to absorb losses on the open positions and to open new ones. A new order needs free margin at least as large as its required margin, or the ticket refuses it.

Free margin moves with the market even when you do nothing. A losing position lowers equity, and because the margin stays the same, free margin falls by the same amount. That is why a trade that fitted comfortably in the morning can leave you with nothing spare by the afternoon.

Margin level

Margin Level is equity divided by margin, as a percentage. Equity of 5,000.00 USD against margin of 1,000.00 USD is a margin level of 500%. With no positions open there is no margin and no level to show.

Your Broker sets two thresholds on this number for each Server:

• The margin call level. When your margin level falls to it, the terminal shows a Risk Warning reading "Margin level" followed by the percentage and "approaching stop-out". It is a warning; nothing is closed yet.
• The stop out level, lower than the margin call. When the margin level falls to it, or equity falls to zero, positions are closed at the market to bring the account back above it.

A stop out closes one position at a time, starting with the one losing the most, and checks the level again after each close. It stops as soon as the account is back above the stop out level, so some positions can survive it. Every position closed this way is marked Stop Out in History. The exact margin call and stop out percentages are your Broker's settings; ask the firm if they are not in its account terms.

Keeping away from the stop out

The margin level falls when open positions lose money or when you add to them. It rises when you close or reduce a position, when positions move into profit, or when your Broker books a deposit. If you see the Risk Warning, choose your own response before the stop out level chooses one for you. A stop loss on every position caps how far each one can pull equity down. Placing orders shows how to set one on the chart.

Trading leveraged products carries a high risk of loss, and leverage raises the size of both the gains and the losses on the same move.