Equity vs balance in prop trading

One account, two useful measurements

Balance is the ledger after closed trades and relevant charges have been recorded. Equity is the account's current value after including open P&L under the platform's calculation. With no open positions and no pending adjustment, the values are often the same. With open positions, they can move apart on every price update.

For a simplified example, start with a $100,000 balance and an open gain of $1,200. Equity is approximately $101,200 before any additional costs or adjustments. If the same position moves to a $900 open loss, equity becomes approximately $99,100. The balance can remain $100,000 through both changes because the trade is still open.

An equity floor sees the open loss

The 2-Step Standard overall maximum loss is 10% static. On a $100,000 start, the floor is $90,000. If equity falls through that line, a higher closed balance does not provide an exemption. The open positions have already taken the account beyond its permitted floor.

A recovery after touching a prohibited level does not reconstruct an unbroken compliant path. This is why a statement that a trade was eventually profitable cannot answer a risk-rule question by itself. Keep the sequence of equity values, execution and timestamps when investigating a disputed event.

Equity can also set tomorrow's baseline

MultiFunded uses the higher of balance or equity at midnight UTC to set the daily baseline. An open gain carried across that moment can therefore raise the next day's baseline. Once set, the daily line does not simply follow equity back down when that gain disappears.

At a hypothetical midnight balance of $100,000 and equity of $103,000, the baseline is $103,000. The flagship 5% daily percentage sets a floor at $97,850. Returning to $100,000 equity uses $3,000 of room even though the closed ledger has barely changed.

Use net values and verify platform fields

Spreads, commissions and swaps can affect the account readouts. Some costs are visible immediately; others are booked at defined times. Check the instrument and account specifications instead of assuming a chart's price move equals your net result. Your journal should reconcile with the platform statement after the position closes.

Different screens can show balance, equity, free margin and floating P&L close together. Free margin is not another name for safe loss room. It relates to margin requirements and open positions. Label each field in your notes so that a margin figure is not accidentally used as the remaining daily allowance.

A simple account-state routine

Before opening an idea, record balance, equity, the daily floor, the maximum-loss floor and existing open risk. Calculate the smaller distance from current equity to the two loss floors. Then consider how much of that room is already exposed if several positions move adversely together, including a buffer for execution costs.

After the session, save a statement and reconcile the closed result with the journal. For trades held through midnight, record the baseline separately. If a dashboard field is unclear, stop adding exposure and ask for its definition. Correct labels are a small operational habit that can prevent a large misunderstanding about the account's condition.

Key takeaways

• Equity changes while trades remain open; balance can stay unchanged.
• Equity-based limits do not wait for a position to close.
• Record the midnight baseline and distinguish free margin from loss room.

Sources and rule check

MultiFunded-specific details were checked against the programme configuration and rulebook on 23 October 2026. Read the conditions attached to your own account before trading; educational examples do not predict results.

• MultiFunded programme comparison — current phase targets and programme limits.
• MultiFunded trading rules and Terms — definitions, restrictions and reward conditions.
• FTMO Academy: Maximum Loss — an external educational reference for the distinction between equity and balance; its product rules are not MultiFunded's rules.