Calculating Oil Trading Margin in MetaTrader 4 Explained
Examples of How to Calculate Margin in MT4 Platform
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 capital is $1,000 after oil leverage you now control $100,000 - $1,000 is what percentage of $100,000 - it is 1 %) that is your oil margin requirement for your crude oil account.
The oil margin example on MT4 oil Platform below, the set oil trading 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 Crude Oil Trading Margin Calculation - Calculating Crude Oil Margin on MT4 Described
- If = 50:1 Oil Trading Leverage - Used Oil Trading Leverage & MT4 Oil Margin Calculator
Then crude trading margin requirement in MT4 oil Platform = 1/50 *100= 2%
If you have $1,000,
1,000* 50 = $50,000.
1,000 / 50,000 * 100= 2%
(Simplify - your oil capital is $1,000 after oil leverage you control $50,000 - $1,000 is what percentage of $50,000 - it is 2%) that is your oil margin requirement on MT4 oil Platform
- If = 20:1 Oil Leverage - Used Crude Oil Trading Leverage & MT4 Oil Margin Calculator
Then the crude oil margin requirement in MT4 oil Platform = 1/20 *100= 5%
If you have $1,000,
1,000* 20 = $20,000.
1,000 / 20,000 * 100= 5%
(Simplify - your oil capital is $1,000 after oil leverage you control $20,000 - $1,000 is what percentage of $20,000 - it is 5%) that is your oil margin requirement in MT4 oil Platform
- If = 10:1 Crude Oil Leverage - Used Oil Trading Leverage & MT4 Oil Margin Calculator
Then the crude trading margin in MT4 oil Platform 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 capital is $1,000 after oil leverage you control $10,000 - $1,000 is what percentage of $10,000 - it is 10%) that is your oil margin requirement on MT4 oil Platform
What is The Difference Between Maximum Oil Trading Leverage & Used Crude Oil Trading Leverage?
However, you should note that there's a difference between maximum crude trading leverage ( oil leverage given by your oil broker which is the highest oil leverage you can trade with if you select to) & used crude trading leverage ( oil leverage depending on the lots you have opened/open positions on MT4 oil Platform). One is the broker's (Maximum Oil Leverage) & the other is oil trader's (Used Oil Trading Leverage). To explain this oil used oil leverage and maximum oil leverage concept we shall use the oil example above:
If your oil broker has given you 100:1 Maximum Oil Trading Leverage, but you only open a trade of 10,000 dollars in MT4 oil Platform then Used Oil Trading Leverage is:
10,000 dollars: 1,000 dollars (your money)
10:1
You will have used 10:1 Oil Trading Leverage on MetaTrader 4 oil Platform, but your maximum oil leverage is still 100:1 Oil Leverage. This means that even if you are 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 while trading on MT4 oil Platform but you will still select 100:1 maximum oil leverage option for your crude oil account. The extra oil leverage will give you what we call Free Oil Trading Margin on the on MT4 oil Platform, As long as you have some Free margin on your MT4 oil account then your open crude oil trades will not get closed by your oil broker because this margin requirement will remain above the required level on the MT4 oil Platform.
When it comes to crude trading one of your rules: crude oil money management trading rules on your oil plan should be to use oil leverage below 5:1.
In the above MetaTrader 4 oil screenshot example, the trader is using $2683.07, 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 Margin accounts allows traders to control a large amounts of oil units using trading leverage using little of their own capital while borrowing the rest
Obtaining this MT4 oil account will enable you to borrow money from the broker to trade crude trading lots with.
The amount of borrowing power your account gives you what is known as " oil leverage", & is usually expressed as a ratio - a ratio of 100:1 trading leverage means you can control resources worth 100 times your deposit amount.
What this means in Oil terms is that with 1% margin in your crude oil 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 you can never lose more than you invest, losses are limited to your deposits & usually brokers will close-out a trade which extends beyond your deposit amount by executing a margin call. Oil traders must therefore try to keep their margin requirement level above that required. By using oil money management rules and keeping your used oil leverage below 5:1.
