Balance, Equity and Credit are key account values displayed within MetaTrader 5 (MT5) and the Kudo trading platform. Understanding the difference between them can help you better manage your trading account and monitor your available funds.
What is Balance?
Your Balance is the amount of money in your trading account excluding any open profits or losses. It reflects completed deposits, withdrawals, closed trades and any account adjustments.
What is Equity?
Your Equity represents the real-time value of your trading account, including any floating profits or losses from open positions.
It is calculated as:
Equity = Balance + Floating Profit/Loss + Credit
As market prices move, your equity will increase or decrease depending on the performance of your open trades.
What is Credit?
Credit refers to funds that have been added to your account by Kudo but are not part of your deposited balance. Credit may be applied for promotional purposes, account adjustments or other approved account activities where applicable.
Example
If your account has:
- Balance: $1,000
- Floating Profit: $100
- Credit: $50
Your Equity would be:
$1,150
Monitoring your equity is particularly important when trading leveraged products, as it directly affects your free margin, margin level and potential stop-out risk.