MetaTrader 4 Forex Margin Level Percentage Calculator - What is Forex Margin Requirement?
Margin Level Forex Calculator - MetaTrader 4 Margin Level Percentage Calculator - Calculating Forex Margin Example in MT4.
This learn forex tutorial will explain What is Forex Margin Requirement in Forex trading and how it is calculated on the MT4 platform.
Examples of How to Calculate Margin Level Percentage in MT4 Software
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's your forex margin requirement for your forex account.
The forex 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 the 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 FX trader is using only 1% of their trading 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 - MetaTrader 4 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 the $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 trade transactions 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 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 trading balance gets to $500
If your forex broker sets 100% margin requirement of this level before closing out your open positions automatically, then your trades will be closed once your trading account balance gets to $1,000: Meaning the trade will close-out as soon as you the trader execute it because even if you pay One pip spread your account balance will get to $990 and the needed percent is 100% i.e. 1,000 dollars, therefore your orders will immediately get closed out.
Most brokers do not set 100% requirement, but there are those brokers who set 100% aren't suitable for you at all, choose those set 50% or 20% margin requirements, in fact, those who set at 20% are some of the best because the likely hood they close-out your trade is reduced as shown in example above.
MetaTrader 4 Forex Margin Level Percentage Calculator
In the above MetaTrader 4 forex trading screenshot example, trader is using $2683.07, total controlled amount is $268,307, but forex account equity is $16,116.55, therefore used FX trading 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 forex 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 the required margin trading level amount
Using 10:1
If leverage is 10:1 & 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 the 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 * Percent(100)
Margin Requirement = 10,000 %
Investor has 9800% above the required margin trading level amount
