Balance in gold trading
Balance is the money in a trading account from deposits and closed trades only; it ignores open positions, which is why equity can be far higher or lower.
Also called Account balance, Closed balance, Cash balance
Balance is the cash value of a trading account counting only deposits, withdrawals and the results of trades that have already been closed, together with booked swaps and commissions. It does not change while a position is open, however far the trade has moved.
How it applies to gold trading
Platforms show balance, equity, margin and free margin side by side. Balance is the most static of the four: it only moves when a trade closes or money is added or removed. Equity, by contrast, is balance plus the floating profit or loss of open positions. On a fast XAUUSD move the two can drift far apart within minutes.
This difference matters for risk. Margin calls and stop-outs are based on equity, not balance, so an account can look healthy on its balance line while open trades are close to forced liquidation. Many prop-style rules and personal risk limits are also measured on equity.
Worked example
Example (hypothetical numbers): balance is $5,000. You open 0.50 lots of gold at 4,000 and price falls to 3,990. The balance still reads $5,000, but the floating loss is $10 × 100 × 0.50 = $500, so equity is $4,500. If you close the trade, the balance becomes $4,500 too.
A common mistake
Calculating risk per trade from the balance while several losing positions are still open. Size from equity, which reflects what the account is really worth now.
See also: Equity, Floating profit and loss, Free margin, Margin level.
Frequently asked questions
What is the difference between balance and equity?
Balance counts only closed trades and cash movements. Equity adds the floating profit or loss of open trades, so it shows what the account would be worth if everything closed now.
Why did my balance change when I did not trade?
Overnight swaps, commissions and some adjustments are booked to the balance. A swap charged on an open gold position at rollover reduces the balance even though the trade is still open.