Definition
Balance (vs equity)
Closed-trade account value. Balance-based rules ignore floating P&L; equity-based rules include it.
Balance changes only when trades close; equity = balance plus the P&L of open positions. A drawdown 'based on balance' can let a deep floating loss ride; 'based on equity' breaches you in real time.
Every drawdown definition should be read twice: once for the percentage, once for whether its base is balance or equity.
Related terms
General industry definitions — individual firms define terms differently in their own ToS; the decoded rulebook for each firm is the source of truth. Educational, not financial advice.