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# What is Cash Value in NinjaTrader 8

If you look at the account tab of your control panel in NinjaTrader 8, you'll see a bunch of columns.

Do you understand what all of those values mean?

Yeah, I'd bet a lot of experienced traders don't even know them all. Which, of course, means that understanding all of these definitions is not an absolute requirement to be a trader, but it's a good idea nonetheless.

Here's a screen shot of my Sim101 demo trading account in NinjaTrader 8.

## Cash value

Today I want to talk about Cash Value.

Cash value is the total closed value of the whole account.

### What do I mean by closed?

I don't mean the value of your account if you close the account.

By closed I mean that we don't consider the real-time values of any open positions. Instead we assume open positions are still worth whatever we paid for them. We ignore the moment to moment fluctuations of the market value and their impact on the position.

### An Analogy

Cash value is similar to your personal net worth. Let's suppose you have $100,000 in the bank and nothing else. That is your net worth. Then you decide to buy a (small) house for$50,000.

You convert $50,000 of your cash into an asset, the house. The house is worth$50,000. Therefore, your net worth is still $100,000. Of course, I've ignored real estate commissions here. Let's assume real estate commissions are$3000. That $3,000 has to be deducted. My net worth is, therefore,$97,000.

There are other taxes and fees, also, but we don't care about those for this analogy.

Two years later, Zillow.com might say that my house is worth $55,000. But do you really trust zillow? Could that value go back down before you decide to sell? Right, you have no idea what the house will be worth when you decide to sell, so for the sake of simplicity, we'll just assume it's worth what you paid for it:$50,000.

### Calculation

It's perfectly fine to calculate your net worth either way, by assuming the value you paid for the house or by taking the current market value of your house. These are both common accounting practices.

In trading, when we talk about cash value (at least in NinjaTrader) we're using the former technique where we assume your positions are worth what you paid for them.

Both ways of calculating are useful, which is why NinjaTrader provides both values.

The counterpart to cash value, which we'll get to in a future post, is Net Liquidation. It shows us the real-time market value of our account.

Alright, here's how you'd calculate cash value.

The cash value includes any cash you have sitting in the account plus the most recent closed value of all open positions (what you paid for them).

Consider an example: if your account balance before entering a position was $100,000 and then you bought a contract of the E-mini S&P 500 future, well, your account is still worth$100,000 (excluding commissions). We've just converted some cash into a futures contract of equal value.
But let's say we include $5 in commission to open the position. Our cash value is now$99,995.