Balance, Equity, Free Margin and Margin Level

Balance:
When you have no open position, balance is the amount of the money you have in your account. For example, when you have a $5000 account and you have no open position, your account balance is $5000.

Equity:
Equity is your account balance plus the floating profit/loss of your open positions:
Equity = Balance + Floating Profit/Loss
When you have no open position, and so no floating profit/loss, then your account equity and balance are the same.
And for example when you have some open positions and they are $1,500 in profit in total, then your account equity is your account balance plus $1,500. If your positions were $1,500 in loss, then your account equity would be your account balance minus $1,500.

Leverage and Margin

Leverage: Is the bonus you receive from the broker to become able to trade large amounts with having a small amount of money in your account. When the leverage is 100:1, it means you can trade 100 times more than the money you have in your account.

Margin: Is the money that will be placed and engaged in the positions that you take. For example to buy $1000 with the leverage of 100:1, $10 from your account will be engaged in the position ($1000 / 100 = $10). You can not use this $10 to take any other positions, as long as the position is still open. If you close the position, the $10 margin will be released.

FOREX PREDICTION

Forex Prediction and Analysis

I will not be responsible for any losses occurred on investments made by readers as a result of any information contained in this page. THIS ANALYSIS IS JUST FOR GENERAL MARKET VIEW. THE PRICE RATES WOULD NOT EXACT AS IT’S MENTIONED, IT’S JUST THE ESTIMATION PRICE.

December 5, 2012 GMT+7
 
EUR/USD
(Last Price: 1.3056)
SELL, Entry = 1.3065, SL = 1.3105, TP = 1.3025
if wrong then BUY, Entry = 1.3105, SL = 1.3065, TP = 1.3145

Introduction

If you ever travel to another country, you usually have to find a currency exchange at the airport, and then exchange the money you have into the currency of the country you are visiting.

You go to the counter and saw the screen displays a different exchange rates for different currencies.
When you do this, you've essentially participated in the forex market! You've exchanged one currency to another currency. Or in forex trading terms, assuming you are  an American visiting Japan, you've sold dollars and bought yen.

Before you fly back home, you stop at the currency exchange again to exchange the yen and notice the exchange rate has changed. These changes in the exchange rate that allows you to make money in the foreign exchange market.

The foreign exchange market, which is usually known as "forex" or "FX," is the largest financial market in the world