Equity is the sum of the account Balance and P&L (Unrealized Profit/Loss). It reflects the value that’s on your trading account at any point in time. If your P&L is positive, the Equity will be larger than the Balance. If your P&L is negative, the Equity is smaller than the Balance.

Equity = Balance + P&L

While the Balance does not change when the same positions stay open, Equity always changes because P&L does. The moment you close all your positions, your Equity becomes equal to your Balance, P&L turns into realized profit or loss and gets added to the Balance.