How is Forex Margin Calculated? Forex Margin is equal to Used Margin added to Free Margin

Forex Margin = Used Margin + Free Margin

What's Used Margin? : amount of money in your account that has already been used up when buying a currency contract, this contract is one that is displayed in open positions. As a trader you can not use this amount of money after opening a trade order transaction because you have already used it and it is not available to you.

In other words, because your broker has opened up a position for you using capital you have borrowed, you must maintain this usable margin for your trading account as a security to allow you to continue using this leverage he has given you.

What is Free Margin? : amount in your account that you can use to open new trades. This is amount of money in your account which hasn't yet been leveraged because you have not yet opened a transaction with this money - this money also is very important for you as a investor because it enables you to continue holding your open trades as will be explained below.

Example of How is Forex Margin Calculated on MT4?

The forex trading margin examples on MetaTrader 4 forex Platform below, the set leverage is 100:1, the forex margin is equal to forex used margin plus forex free margin.

Forex Margin is equal to Used Margin + Free Margin - How is Forex Margin Calculated?