MT4 Forex Margin Level Percentage Calculator - What is Forex Margin Requirement?
Margin Level Forex Calculator - MT4 Forex Margin Level Percentage Calculator - Calculating Forex Margin Example on MetaTrader 4.
This learn forex tutorial will explain What is Forex Margin Requirement in trading and how it's calculated on MetaTrader 4 platform.
Examples of How to Calculate Margin Level Percentage on MetaTrader 4
If leverage = 100:1
1,000 / 100,000 * 100= 1%
Margin required = 1%
(1/100 *100= 1%)
"TradeForex Trading - Please simplify because I am Beginner'
(Simplify - your forex capital is $1,000 after leverage you control $100,000 - $1,000 is what percent of $100,000 - it's 1%) that is your forex margin requirement for your forex account.
The forex trading margin examples on MetaTrader 4 forex Platform below, the set leverage is 100:1, the forex margin which is 1% is $2683.07, therefore the total amount controlled by forex trader is: $268,307 - this is because with this leverage the trader has used little of his money and borrowed the rest, with this set at 100:1, the trader is using 1% of their capital, this 1% is equal to $2683.07, if 1% is equal to $2683.07 then 100% is $268,307
MetaTrader 4 Forex Margin Calculator - MT4 forex margin level percentage calculator Example
Now if Your FX Trading Leverage is 100:1
When trading if you have $1,000 and use option 100:1 & buy 1 Mini lot for $10,000 your margin on this transaction is $1000 dollars in your forex account, this margin is the money that you will lose if your open trade transaction goes against you - the other $99,000 that is borrowed, the broker will close the open trades automatically once your $1,000 has been taken by the market.
But this is if your forex broker has set 0% Margin Requirement before closing your trades automatically.
For 20% margin requirement before closing your trades automatically, then your trade transactions will be closed once your account trading balance gets to $200
For 50% margin requirement of this level before closing your trades automatically, then your trade transactions will be closed once your account trading balance gets to $500
If your FX broker sets 100% margin percent level requirement level before automatically closing your open trade positions, then your open trades will be automatically closed once your account balance gets to $1,000: Meaning that the trade will be closed out as soon as you execute it because even if you pay 1 pips spreads your trading account balance will get to $990 and the needed percent is 100% i.e. 1,000 dollars, therefore your trade orders will immediately get closed out.
Most brokers do not set 100% requirement, but there are those brokers who set 100% are not suitable for you at all, select those set 50% or 20% margin requirements, in fact, those brokers that set it at 20% are some of the best because the likely hood they closeout your trade is reduced as displayed in the example above.
MetaTrader 4 Forex Margin Level Percentage Calculator
In the above MT4 forex trading screen shot example, the trader is using $2683.07, total controlled amount is $268,307, but forex account equity is $16,116.55, therefore used FX leverage is ($268,307 divide by 16,116.55) = 16.64 : 1
16.64 : 1 Used forex Leverage
The Margin is 600% which is 580% above the required 20% Margin requirement by the broker.
To know about this margin level which is calculated by your MT4 platform automatically - the MT4 Platform will display this as "Margin Requirement", This will be displayed as a percentage the higher the percentage the less likely your trades are to get closed.
For Examples if - (using a broker that requires 20% margin requirement)
Using 100:1 leverage
If leverage is 100:1 & you transact 10 Mini Lots, equals to $100,000
$100,000 dollars divide by 100:1, your used capital is $1000
Calculation:
= Capital Used * Percentage(100)
= $1,000/$1000 * Percentage(100)
Margin Requirement = 100 %
Investor has 80% above required margin trading level amount
Using 10:1
If leverage is 10:1 and you transact 1 Mini Lot, equals to $10,000
$10,000 dollars divide by 100:1, your used capital is $100
Calculation:
= Capital Used * Percentage(100)
= $1,000/$100 * Percentage(100)
Margin Requirement = 1000 %
Investor has 980% above required margin trading level amount
Using 1:1 leverage
If leverage is 1:1 & you transact 0.1 Mini Lot, equals to $1,000
$1,000 dollars divide by 100:1, your used capital is $10
Calculation:
= Capital Used * Percentage(100)
= $1,000/$10 * Percentage(100)
Margin Requirement = 10,000 %
Investor has 9800% above required margin trading level amount
