In plain English
What Account balance means
For trading accounts, balance is the realized cash value of the account. It changes when positions are closed, deposits are made, withdrawals are taken, or fees and financing charges are applied. Open trades do not change balance until they are closed, even though they can change equity.
Why it matters
Balance is the starting point for many account calculations, including position sizing and withdrawals. Traders who confuse balance with equity may overestimate how much capital is truly available.
Example
If an account starts at $5,000 and a closed trade earns $200 while a $20 commission is charged, the new balance is $5,180. This example is simplified and assumes no other transactions.
Quick answers
Common questions
Does a deposit change account balance?+
Yes. A deposit increases balance, while a withdrawal decreases it.
Can balance go down before a trade is closed?+
Not because of price movement alone. Open losses affect equity, not balance, until the position is closed.
Sources