Trading Basics: Understanding Your Trading Account Finances
For a new trader, the terms or layout of a trading account might initially be intimidating.
The IRONEFX trading platform is fairly straightforward; but, let’s take the opportunity to review the basic layout.
At the top of the trading platform is your account statement.
Here is an example.
The Balance displayed is a combination of your investment, your open trades (whether they are at a profit or loss) and your used margin (the amount invested in open trades).
Your Equity may be the most relevant information as it is a combination of your investment and your current open trades. If all your trades were closed this would be the amount a trader could withdraw from. When you have no open trades your balance and equity should be the same.
Open P & L simply means the total profit and loss of all open trades.
Since in this example we can see there is about a $1,400 difference between the balance and the equity while only $1.47 in Open P& L that would mean the difference is the used margin (the amount of the investment committed to open trades). For this account, if the client wanted to open up trades that required more than the $601 remaining could support they would either need to either close some trades to lower their used margin or increase their investment size by depositing additional funds.
The payout column in open trades will show you how much used margin is committed to an open trade and how much will be added to the account balance and available “free margin” once that trade closes.
The open p/l shows the profit or floating loss on each individual trade while the swap would show any market costs accrued for any longer-term trades.
For further insights on how to read and use your IRONEFX trading platform, consult your trading specialist.