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Sizing from equity or from balance in an EA, and the difference in a losing streak

my EA sizes positions as a percent of the account, but I had to decide which number to use: the balance or the equity. They differ when there are open trades, and the choice affects behaviour more than I expected.

Using the balance is stable. It only changes when trades close, so the size is predictable. The downside is that it ignores floating profit and loss, so if several trades are open and losing, the next one is still sized from the old balance.

Using the equity responds immediately to floating results. If I'm losing on open trades, the new trades are smaller, which is a kind of automatic brake. If I'm in floating profit, they get larger, which can be a problem if that profit then reverses.

I use the balance for the base risk and apply the equity as a cap. If the equity is lower than the balance by some amount, the size is reduced. If it's higher, I don't increase it. That gives me the stability of one and the safety of the other.

I tested the options in a long run, and the drawdown with the cap was smaller than with either alone.

I went with balance for sizing as well, but I added a check on equity drawdown on top. If the floating loss on open trades goes beyond a set amount, the EA stops opening new positions until things settle. That gives me the predictability of balance sizing without ignoring the risk that is already sitting on the account. The combination felt more sensible than picking one number and living with its weak spot. On a prop account it also matters because the daily limit is usually measured on equity, not balance.

Something that surprised me when I tested both was how equity sizing behaved during a run of open winners. The new trades got bigger right at the moment when the market was stretched, and then a reversal hit the bigger positions hardest. In a losing streak equity sizing helps, but in a winning streak it can add risk at the worst time. That was enough for me to stay with balance and treat floating profit as not real until the trade closes.