Current capital after gains and losses. Finviro's term: “Equity”.
What this value is
Account equity (Account Equity) is the net amount you own in your trading account at this moment: cash plus the current market value of all open positions. It is the number you would walk away with if you closed everything now. It is the base for all risk and performance math, not the cash balance alone.
Why it is the only ruler
All management rules are built on it: "No risk above 1% per trade" means 1% of the current value, not of the starting capital. Absolute risk shrinks automatically after losses (self-protection) and grows after gains. The discipline breathes with the account. True performance and the maximum drawdown (Drawdown) are measured from it.
Equity and margin
In margin accounts it becomes the gatekeeper: if it falls below maintenance requirements, a margin call follows, meaning an immediate deposit or a forced liquidation at the worst prices. Watching it during exposure, not after, is the difference between managing your risk and being managed by your broker's liquidations.
Hypothetical example
An account that started with $50,000 is worth $43,000 today after a losing streak. A 1% rule now means $430 of risk per trade, not $500. The automatic shrinking slows the bleeding. Someone who kept sizing on the original capital actually risked 1.16%, rising with every loss: exactly the opposite of what's needed, at the worst time.
Common mistake
Measuring performance against the cash balance or against a personal peak. Cash ignores open positions, and clinging to the peak ("I'll get back to the high and then assess") is emotional accounting that delays cutting size exactly when it is most needed.
Why every rule is measured against it
"No risk above 1%" means 1% of the current value, not of the starting capital. So absolute risk shrinks automatically after losses and grows after gains. The discipline breathes with the account. Anyone who calculates it from a personal peak risks more as he loses, the opposite of what's wanted.
Where to see it on the platform
The trading journal calculates it live with its positions, and draws its curve and the maximum drawdown, the ruler every rule is measured against.
The trading journal calculates it live with its positions and draws its curve and the maximum drawdown.
