The first thing to understand about the foreign exchange market is the terminology used in trading, with "balancing" being the most important term to know. On the forex market, the balance is the total amount of money in your account. This article will explain the definition and benefits of balance in forex trading for your benefit.

What Is a Forex Market Balance?

The balance in the foreign exchange market is the overall quantity of accessible money, not the real-time balance. Thus, the balance in your account will stay unchanged until the transaction is closed. However, if the broker with whom you established your account gives a bonus, your account balance will equal the whole sum plus the bonus.

Balance Calculation

- You have a $1000 balance in your account and have placed an order.

- The order you placed has a $200 loss.

- $1,000 remains in your account.

- If you close the order, your account balance will immediately be decreased to $800.

Benefits of Balance

Balance informs you of your account's total amount. If you know how much money you have in your account, you can trade more strategically. In addition, when you withdraw money from your trading account, the bonus you earned at account opening will be withdrawn as well.

Conclusion

The forex market balance equals the entire value in your account plus any bonuses you earn from your broker. Moreover, if you have an open order, the balance will not change until the order is closed. Thus, balance can facilitate your trade planning.

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