What's Margin Level in Forex? - Margin Level in Forex Trading Example

We shall first explain the various forex margin levels used in platforms & then explain what forex margin level is using an example in MT4 platform.

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

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

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

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 What are the Forex Margin Levels in MetaTrader 4

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

Margin Level in Trading Forex Explained - Forex Margin Level in MetaTrader 4 Example Explained