MT4 Oil Trading Margin Level : Example of How to Calculate Oil Leverage in MT4

Margin required in this case is 1,000 dollars (your money) if it is expressed as a percentage of 100,000 dollars which you control it is:

If oil leverage = 100:1

1,000 / 100,000 * 100= 1%

Margin required = 1%

(1/100 *100= 1%)

"Trade Forex Trading - Please simplify because I am Beginner"

(Simplify - your oil trading capital is $1,000 after oil leverage you now control $100,000 - $1,000 is what percent of $100,000 - it's 1 %) that's your oil trading margin requirement for your crude oil trading account.

The oil trading margin example explained below, the set crude oil leverage is 100:1, the oil margin which is 1% is $2683.07, therefore the total amount controlled by the trader is: $268,307 - this is because with this leverage the trader has used little of his money & borrowed the rest, with this set at 100:1, the trader is using 1 % of their capital, this 1% is equivalent to $2683.07, if 1% is equal to $2683.07 then 100% is $268,307

MT4 Oil Trading Margin Level : Examples of How to Calculate Oil Trading Leverage on MT4

• If = 50:1 Oil Trading Leverage - Used Oil Trading Leverage

Then oil trading margin requirement = 1/50 *100= 2 %

If you have $1,000,

1,000* 50 = $50,000.

1,000 / 50,000 * 100= 2%

(Simplify - your oil trading capital is $1,000 after oil leverage you control $50,000 - $1,000 is what percentage of $50,000 - it's 2%) that is your oil trading margin requirement

• If = 20:1 Crude Oil Leverage - Used Oil Trading Leverage

Then the oil margin requirement = 1/20 *100= 5%

If you have $1,000,

1,000* 20 = $20,000.

1,000 / 20,000 * 100= 5%

(Simplify - your oil trading capital is $1,000 after oil leverage you control $20,000 - $1,000 is what percent of $20,000 - it is 5 %) that's your oil trading margin requirement

• If = 10:1 Oil Leverage - Used Oil Trading Leverage

Then the oil trading margin requirement is = 1/10 *100= 10 %

If you have $1,000,

1,000* 10 = $10,000.

1,000 / 10,000 * 100= 10%

(Simplify - your oil trading capital is $1,000 after oil leverage you control $10,000 - $1,000 is what percent of $10,000 - it is 10 %) that's your oil trading margin requirement

What is The Difference Between Maximum Crude Oil Leverage and Used Oil Trading Leverage?

However, you should note that there is a difference between maximum oil trading leverage ( oil trading leverage given by your oil broker which is the highest oil leverage you can trade with if you select to) and used oil trading leverage ( oil trading leverage depending on the lots you have opened/open trade positions). One is the broker's (Maximum Oil Leverage) & the other is oil trader's (Used Oil Trading Leverage). To explain this oil trading used crude oil leverage & maximum oil leverage concept we shall use the crude oil trading example above:

If your oil broker has given you 100:1 Maximum Oil Leverage, but you only open a trade of 10,000 dollars then Used Oil Trading Leverage is:

10,000 dollars: 1,000 dollars (your money)

10:1

Your have used 10:1 Oil Leverage, but your maximum oil leverage is still 100:1 Oil Leverage. This means that even if you're given 100:1 Maximum Oil Leverage or 400:1 Maximum Oil Leverage, you don't have to use all of it. It is best to keep your used oil leverage to a maximum of 10:1 but you will still select 100:1 maximum oil leverage option for your oil trading account. The extra oil leverage will give you what we call Free Crude Oil Margin, As long as you have some Free margin on your oil trading account then your open crude oil trades will not get closed by your oil broker because this margin requirement will remain above required level.

When it comes to oil trading one of your rules: oil trading money management guidelines on your oil trading plan should be to use oil trading leverage below 5:1.

In the above MT4 oil trading screenshot example, the trader is using $2683.07, the total controlled amount is $268,307, but oil account equity is $16,116.55, therefore used oil leverage is ($268,307 divide by 16,116.55) = 16.64 : 1

16.64 : 1 Used Oil Trading Leverage

Oil Trading Margin accounts allows traders to control a large amounts of oil trading units using trading leverage using little of their own capital while borrowing the rest

Obtaining this oil account will enable you to borrow money from the broker to trade oil trading lots with.

The amount of borrowing power your account gives you what is called " oil trading leverage", and is usually expressed as a ratio - a ratio of 100:1 leverage means you can control resources worth 100 times your deposit amount.

What this means in Oil Trading terms is that with 1% margin in your oil trading account you can control a trade worth $100,000 with a $1,000 deposit.

However, Trading this margin oil account increases both potential for profits as well as losses. In Oil Trading you can never lose more than you invest, losses are limited to your deposits & usually brokers will close a transaction that extends beyond your deposited amount by executing what is referred to as a margin call. Oil traders must therefore try to keep their trading margin requirement level above that required. By using oil trading money management guide-lines and keeping your used oil trading leverage below 5:1.