Balance vs equity
Balance counts only closed trades; equity is balance plus the profit or loss of open trades.
With a $100,000 balance and an open trade down $1,500, equity is $98,500. Rules can use either. Many firms check the drawdown and daily limit against equity in real time, so an open loss can breach a limit before the trade closes.
The difference also matters for trailing rules that follow equity: open profit that you never bank can still raise the floor. Read whether each rule in your challenge uses balance or equity.
Related
General definition. Rules differ between firms and change over time; your firm’s current terms always take precedence.