What is Margin Level in Forex? - Margin Level in Forex Trading Example

We shall first explain the various forex margin levels used in forex trading platforms & then explain what forex margin level is using and example on MetaTrader 4.

Forex Margin, Margin Required, Equity, Used Margin and Free margin

What's Margin Required? : It is amount of money your Forex broker requires from you to open a position. It is expressed in percents.

What is Equity? : It is the total amount of capital you have in your account.

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 What are the Forex Margin Levels on MT4

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

What is Margin Level in Forex? - Margin Level in Forex Example Explained