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

Forex Margin = Used Margin + Free Margin

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

In other words, because your broker has opened up a position for you using the capital you've borrowed, you must maintain this usable margin for your 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 trade positions. This is the amount of money in your account that has not yet been leveraged because you have not yet opened a transaction with this money - this money also is very important for you as a trader because it enables you to continue holding your open trades as will be explained below.

Example of How is Forex Margin Calculated in MT4?

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

How is Margin Calculated? - Margin is Equal to Used Margin added to Free Margin - Used Margin vs Free Margin