reference · Risk & sizing
Balance, Equity and Unrealized P&L: Reconcile an Account Ledger
Balance reflects posted account transactions. Equity incorporates the account's current valuation, including open-position P&L under its rules. Closing a position often moves a result between categories rather than creating the loss or gain at that moment.
Key points
- Compare balance and equity at the same timestamp in the same currency.
- Deposits and withdrawals change account value without being trading returns.
- Do not add a settled or realized result to equity a second time.
Scope and assumptions
- The ledger uses a simple account with no credit, financing, taxes, currency conversion or new transaction costs. Futures settlement and broker bookkeeping can use different presentation conventions.
Account totals describe different layers
Balance is an accounting total after transactions have been posted. Equity represents current account value under the broker's valuation rules. Unrealized P&L is the marked result of positions that remain open; realized P&L is associated with completed or settled activity according to the reporting convention. MetaQuotes exposes these account values separately.
For a simple account with no credit or other adjustments, equity can be written as balance plus unrealized P&L. That shortcut is useful only after checking what the balance and open-position fields already include. Commission, swap, credit and settlement presentation can differ between reports.
Watch the same loss move through a ledger
Suppose a hypothetical account has a $5,000 balance and an open position marked at a $300 loss. There are no other positions or charges.
| Event | Balance | Unrealized P&L | Equity |
|---|---|---|---|
| Position remains open | $5,000 | −$300 | $4,700 |
| Close at exactly the marked price | $4,700 | $0 | $4,700 |
| Deposit an additional $1,000 | $5,700 | $0 | $5,700 |
The close does not create a second $300 loss. It converts an already reflected open loss into a posted result. The deposit increases equity by $1,000, but it is not trading profit. A return calculation that treats this cash inflow as a gain would misstate performance.
If the eventual close is $20 worse than the earlier mark and costs another $5, the result differs from this simplified table. The correct reconciliation records the extra execution loss and charge once each. It does not deduct the entire original $300 again.
Align timestamps before comparing accounts
A balance captured before an exit and equity captured after it can appear inconsistent even when both are valid. Record the observation time and use the same valuation currency. For accounts in different currencies, isolate exchange-rate translation from trading P&L.
Also check whether one statement reports gross trading P&L while another reports net P&L after financing and commission. The field labels and broker statement should determine the comparison. A screenshot displaying a larger number is not enough to establish that one account performed better.
Respect settlement and collateral rules
Futures daily mark-to-market can post cash adjustments while exposure remains open. That is a different presentation from keeping all of a position's lifetime change unrealized until closure. CME's settlement explanation provides the underlying distinction.
Equity also differs from free margin and withdrawable funds. Read free margin and margin level before interpreting current equity as spare trading capacity. When comparing copied accounts, reconcile cash flows, quantities, fills, posted costs and remaining exposure first. Equal strategy instructions do not imply equal account ledgers.
A practical reconciliation starts from opening equity, adds net deposits, and accounts for the period's trading result and charges to reach closing equity. Any unexplained remainder should be investigated before calculating returns or comparing accounts with different cash-flow histories.
Questions and answers
Does closing a losing position immediately reduce equity by the loss again?
Not in the simplified example when that same loss was already included in the current equity mark. Closing transfers it into realized balance; execution differences and charges can change the final amount.
Can balance rise while the strategy is losing?
Yes. Deposits, credit adjustments or realized gains alongside larger open losses can raise balance. Evaluate cash flows and open positions before interpreting an account total as performance.
Is equity the cash I can withdraw immediately?
Not necessarily. Margin requirements, settlement, credit restrictions, pending charges and broker withdrawal rules can affect available funds. Check the account's actual withdrawal calculation.
Sources and further checks
Use the current source for your exact instrument, account and platform. Referencing a general specification does not establish support for every TradeCopier workflow.
- MetaQuotes: Account Information · Checked September 19, 2026
- MetaQuotes: Basic Principles of Trading · Checked September 19, 2026
- CME: Mark-to-Market · Checked September 19, 2026
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