How to Calculate Equity in MT4

Equity is the real-time total value of your trading account in MT4. It combines two components: your balance (the cash settled in your account from completed transactions) and your floating P&L (the unrealised profit or loss from currently open positions). Unlike balance, equity updates continuously as prices move.

This article explains how MT4 calculates equity, how each component contributes, worked examples through a trade lifecycle, where to see equity in the platform, and how equity relates to balance, free margin, and margin level.

What Is Equity in MT4?

Equity is the live total value of your trading account at any given moment. It tells you what the account is worth right now, accounting for both settled cash and the current unrealised P&L on open positions.

When you have no open positions, equity equals balance (since floating P&L is zero). When you have open positions, equity diverges from balance by the amount of unrealised P&L. As markets move, equity moves with them, even while balance stays constant.

Equity is one of five key account metrics shown in the Trade tab footer at the bottom of the MT4 Terminal window: Balance, Equity, Margin, Free Margin, and Margin Level.

The Equity Formula

The formula is straightforward:

Equity = Balance + Floating P&L

Where Balance is your realised cash from settled transactions only (deposits, withdrawals, closed trade results, commission charges, swap charges or credits), and Floating P&L is the sum of unrealised profit or loss across all currently open positions.

The formula has several useful implications. When you have no open positions, floating P&L is zero, so equity equals balance. When you have open positions, equity diverges from balance by the amount of unrealised P&L. As markets move, equity moves with them, even while balance stays constant.

How Equity Changes

Several events affect equity. Some change balance (and therefore equity); others change floating P&L (and therefore equity but not balance).

Events that change balance (and equity):

A deposit increases balance and equity by the deposit amount.

A withdrawal decreases balance and equity.

Closing a trade at a profit moves the realised profit to balance; equity is unchanged at the moment of closure because the floating P&L on that trade becomes zero at the same instant the realised result moves to balance.

Closing a trade at a loss moves the realised loss to balance; equity is unchanged at the moment of closure.

A commission charge on a Raw or Nano account is realised against balance at the moment the trade is opened, since the full round-turn commission is charged at opening and covers both the open and close of the trade. Equity decreases by the commission amount at trade opening.

A swap charge or credit is realised once per day at 22:00 GMT for forex positions held open. A swap debit reduces balance and equity; a swap credit increases both.

Events that change floating P&L (and equity but not balance):

A favourable price move on an open position increases floating P&L and therefore equity, while balance stays the same.

An unfavourable price move on an open position decreases floating P&L and therefore equity, while balance stays the same.

Opening a new position has approximately zero immediate effect on floating P&L (ignoring the bid-ask spread, which shows up as a small negative floating P&L from the entry moment). For Raw and Nano account holders, the immediate effect on equity is the commission deduction from balance, not the floating P&L on the new position.

Worked Examples

Examples below assume a USD account starting at USD 10,000.

Initial State (No Positions)

Balance: USD 10,000 Floating P&L: USD 0 Equity: 10,000 + 0 = USD 10,000

Without open positions, equity equals balance.

Opening a Position on a Standard Account

Open 1.0 lot long EURUSD at 1.0850 on a Standard account (no commission on forex).

Balance: USD 10,000 (unchanged at the moment of opening; spread cost is reflected in the entry price but no separate commission is charged) Floating P&L: approximately USD 0 (ignoring the small negative impact of the bid-ask spread) Equity: 10,000 + 0 = USD 10,000

Strictly speaking, the spread cost shows up as a small negative floating P&L from the moment of opening, typically a few dollars on a standard lot. For round-number examples we use approximately zero.

Opening the Same Position on a Raw Account

Open the same trade on a Raw account, where commission is USD 6 per round turn lot, charged in full at trade opening.

Balance: 10,000 - 6 = USD 9,994 (commission deducted at opening, covers both open and close of the trade) Floating P&L: approximately USD 0 Equity: 9,994 + 0 = USD 9,994

The Raw account's commission is reflected in equity immediately at opening, even before the position has moved.

Favourable Price Move

Return to the Standard account position (1.0 lot long EURUSD at 1.0850). Price moves to 1.0900, gaining 50 pips.

Floating P&L: 1.0 lot x 50 pips x USD 10 per pip per standard lot = +USD 500 Balance: USD 10,000 (unchanged, position still open) Equity: 10,000 + 500 = USD 10,500

Equity has moved up by USD 500 even though balance is unchanged. The gain is unrealised; it only becomes part of balance when the position is closed.

Unfavourable Price Move

Price now moves to 1.0750, losing 100 pips from entry.

Floating P&L: 1.0 lot x -100 pips x USD 10 per pip per standard lot = -USD 1,000 Balance: USD 10,000 (unchanged) Equity: 10,000 + (-1,000) = USD 9,000

Equity has dropped by USD 1,000 even though balance is unchanged. The loss is unrealised at this point.

Closing the Position at the Loss

Close the EURUSD position at the -USD 1,000 floating loss level (price 1.0750).

The -USD 1,000 floating loss is realised against balance:

Balance: 10,000 - 1,000 = USD 9,000 Floating P&L on EURUSD: USD 0 (position now closed) Equity: 9,000 + 0 = USD 9,000

Equity at the moment of close is the same as immediately before close (USD 9,000 either way). What changed is the composition: the loss is now part of balance rather than part of floating P&L.

This illustrates a key property of equity: closing a position does not change equity at the moment of closure. It only changes how equity is composed between balance and floating P&L.

Where to See Equity in MT4

Equity is displayed in the Trade tab footer of the Terminal window.

Open the Terminal window with Ctrl+T. Click the Trade tab if it is not the currently active tab. At the bottom of the Trade tab, you will see a summary row containing: Balance, Equity, Margin, Free Margin, and Margin Level.

The "Equity" field is the current equity. It updates in real time as prices move and as positions are opened, modified, or closed.

If you have no open positions, the Equity field equals the Balance field.

Equity, Balance, Free Margin, and Margin Level

The Trade tab footer shows five related account metrics. Understanding how each relates is useful.

Balance is realised cash only (settled transactions). It changes only when trades close, commissions or swaps post, or deposits and withdrawals settle.

Equity is Balance plus Floating P&L. It updates in real time with price movement.

Margin (used margin) is the amount held as collateral for open positions.

Free Margin is Equity minus Used Margin. It is the amount available for new positions or to absorb floating losses.

Margin Level is (Equity / Used Margin) x 100, expressed as a percentage. At TIOmarkets, margin call triggers at 100% margin level and stop-out at 30% (40% on Standard accounts using 1:2000 leverage under the unlimited leverage feature on MT5). These levels are subject to change depending on market conditions and applicable regulatory requirements.

Equity sits at the centre of these metrics. It is the input to free margin and margin level, and it is the figure that determines whether the account is approaching margin call or stop-out thresholds.

Practical Considerations

Equity is the most important live metric for understanding the real-time state of your account. Watching balance alone can mask large floating losses (or gains) on open positions; equity gives the real-time picture.

For traders running multiple positions, equity reflects the net position across all open trades. The total floating P&L is simply the sum of floating P&L across all positions. A combination of winning and losing positions nets out into a single floating P&L figure, which combined with balance gives equity.

Equity does not reflect any pending deposit or withdrawal in transit. Once a deposit settles or a withdrawal completes, balance and equity adjust accordingly.

For accounts on Raw or Nano (where USD 6 per round turn lot commission applies), the equity drop at trade opening can look surprising to new traders. The commission is realised immediately against balance, covers both the open and close of the trade, and does not get re-charged when the trade closes.

Spreads are variable and are typically higher than minimum figures shown. The bid-ask spread is a cost reflected as slightly negative floating P&L immediately on opening a position. Orders are executed at the best available market price, which may result in positive or negative slippage. Demo accounts often execute instantly and may not fully replicate live slippage conditions.

For calculating expected margin requirements that will affect free margin (Equity minus Used Margin), the Margin Calculator gives the exact margin required for a given position size and account currency. This is useful before opening a position to understand its impact on free margin.

Leverage on each instrument is subject to change depending on market conditions and applicable regulatory requirements.

Trading at TIOmarkets

TIOmarkets offers MetaTrader 4 and MetaTrader 5 on desktop, web, and mobile, across four account types. The Standard account is created automatically on registration with a minimum deposit of $20 or currency equivalent. The Raw and VIP Black accounts are opened separately through the client area. The Nano account is MT5 only with a $20 minimum deposit, USD only. Hedging is supported on all accounts. A swap-free Islamic account is available; contact TIOmarkets for eligibility and instrument requirements. Copy trading is available on both MT4 and MT5.

Orders are executed at the best available market price, which may result in positive or negative slippage. Demo accounts often execute instantly and may not fully replicate live slippage conditions. Spreads are variable and are typically higher than minimum figures shown. Leverage on each instrument is subject to change depending on market conditions and applicable regulatory requirements. You can review the full list of account types on the TIOmarkets accounts page.