What is Account Balance?
Understanding Account Balance
Wondering what “Account Balance” is? Let’s break it down.
Imagine you want to start trading currencies. First, you need to open an account with a trading company.
Once you’re set up, you can put money into that account.
But, remember, only put in money you’re okay with potentially losing.
This money you add is your “Account Balance”. Think of it as the amount of money you have in your trading account.
For example, if you add $1,000, your account balance shows $1,000.
Here’s something important: Even if you start trading (or as traders say, “open a position”), your account balance doesn’t change until you finish that trade.
Three things can change your balance:
- Adding more money.
- Finishing a trade.
- If you keep a trade going overnight, you might get a small fee or payment.
This fee is called a swap.
What’s a swap?
Imagine ending your trade for the day and then starting it again the next day. This process is a rollover. And during it, you either pay or get paid a small amount called a swap.
If you’re given money, it gets added to your account. If you’re charged, it’s taken from your account. These amounts are generally small, but they can add up.
For those using the MetaTrader tool, you can see these fees if your trade lasts more than a day.
We won’t dive deep into swaps and rollovers now. Just know they exist and can affect your balance.