Calculate exact margin requirements in real-time. Adjust leverage, lot size, and currency pairs to simulate trading scenarios and manage risk[citation:1][citation:4].
Margin is the capital required to open and maintain a leveraged trading position. It acts as a security deposit with your broker[citation:7]. The fundamental formula used by professional traders is:
Example Calculation: Buying 1 lot of EUR/USD at 1.2000 with 1:100 leverage:
Margin = (1 × 100,000 × 1.2000) ÷ 100 = $1,200[citation:7]
A margin call occurs when your account's equity falls below the required margin level, typically around 80-100%[citation:1]. This triggers automatic position liquidation to prevent negative balances. Professional traders maintain margin levels above 200% to withstand volatility.
With 1:100 leverage, you control $100,000 in the market with only $1,000 of your own capital. This amplifies both profits and losses by 100 times[citation:1]. Professional traders often use lower leverage (5:1 to 30:1) for better risk management[citation:2].
Margin is not a fee or cost—it's collateral that's returned when you close the position[citation:2]. Unlike a deposit, margin requirements can change with market volatility and position size.
When your margin level drops below the broker's threshold (usually 80-100%), you'll receive a margin call warning. If not addressed by depositing more funds or closing positions, the broker will automatically liquidate positions to cover potential losses[citation:1][citation:4].
Experts recommend: 1) Using conservative leverage (5:1 to 30:1), 2) Never risking more than 1-2% of account per trade, 3) Maintaining margin levels above 200%, 4) Regularly monitoring free margin, and 5) Using stop-losses on every position[citation:2][citation:8].
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