Forex Margin Calculator

Concept of leverage and margin:

Leverage is a facility provided by brokerage firms that enables investors to trade with a multiple of their account size. For example, if a brokerage offers 100:1 leverage, it means the company allows the investor to trade with an amount equivalent to 100 times the original trade size in the market. In return for providing leverage, the brokerage firm holds a portion of the investor's account as margin. This margin is used as collateral to enable the investor to utilize leverage. For instance:
With 100:1 leverage, if an investor wants to purchase a mini trading contract worth $10,000, the required margin would be a fraction of that amount.
The percentage of margin required changes based on the leverage ratio; the higher the leverage, the lower the margin required, and vice versa.

Important terms for margin trading:

• Reserved margin (Used Margin) It is the amount that the broker reserves in exchange for executing the trade.
• Available margin (Usable Margin) It is the amount that remains in the account after taking the reserved margin, through which new deals can be opened, and in the event of a loss, the broker takes from it what covers the value of the losses.
• Margin call (Margin Call) It is an alert message that the broker sends to the client to warn him of the imminent exhaustion of available margin and the possibility of liquidating deals.
• stop out (Stop Out) It is a process carried out by the broker when the losses equal the margin available in the account, where the broker closes all trades and all that remains in the account is the previously reserved margin.

The video below explains in some detail the concept of leverage and margin and how they work:

alert! The part related to point and margin accounts is one of the most difficult parts facing new investors, but with practice in the demo account it becomes easier and more flexible. Because trading programs do most of these calculations automatically.