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Margin is the part of your account a broker sets aside to hold a leveraged trade open. Pick a pair, a lot size and your leverage to see how much margin the trade needs in US dollars, and what that means for your margin level.
This version is for USD accounts only, so every result is in US dollars. If your account is in another currency, treat the numbers as a guide and convert them yourself.
The prices pre-filled in the form are examples, not live quotes. Replace them with the current price from your trading platform before you use a result.
Leverage lets you control a position larger than your deposit. The broker holds back a fraction of the position value as margin, and that fraction is one divided by your leverage. With 1:100 leverage the margin is one percent of the position value.
To find the position value in dollars the calculator multiplies the lot size by 100,000 units of the base currency and then converts the base currency to dollars. On EURUSD the base currency is the euro, so the price of EURUSD does the conversion. On USDJPY the base is already the dollar, so no conversion is needed.
The two examples use different pairs and leverage, and are computed by the same function as the calculator.
Margin is not a fee. It is a deposit held against the open trade, and it is released when the trade closes. While the trade is open, that part of your balance cannot be used to open other trades. If the trade moves against you, the floating loss comes out of the rest of your account, not out of the margin itself.
Margin level compares what your account is worth with the margin your open trades need. A high level means a large cushion. As floating losses grow, the level falls. Brokers set their own warning and forced-close levels, and they differ, so check your broker's terms. The calculator labels the result Safe from 200 percent, Caution from 100, Warning from 50 and Danger below that. Those labels are a rough guide for this one trade, not your broker's rules.
The calculator assumes this is the only open trade and that your balance equals your equity. If you have other trades open, their margin and floating profit or loss change the real figure.
Raising your leverage lowers the margin you need, but it does not change what one pip is worth on your lot size. It only makes it easier to open a position that is large compared with your account, and a position that is large compared with your account can lose a large share of it quickly. Leverage limits differ between brokers and countries, so the right choice depends on where and how you trade.
Work out the position value in your account currency, which is the lot size times 100,000 units of the base currency, converted to dollars. Then divide by your leverage. The result is the margin the trade needs.
Margin level is your account equity divided by the margin your open trades use, shown as a percentage. This calculator uses your balance as the equity and counts only the trade you entered.
Higher leverage lets you open a bigger position with less margin. The bigger position moves more money for each pip, so it can lose more, and faster. Leverage itself does not decide your loss; the position size does.
The base currency of EURJPY is the euro. To express the position in dollars the calculator needs the EURUSD price, which is different from the EURJPY price.
It should be close for a standard forex account, but brokers can use different contract sizes, margin rates for some pairs and account currencies. Check the contract specification on your platform.
A calculator gives you the arithmetic. If you are new to trading, the free forex course explains pips, lots, leverage and risk in plain language, and the free weekly demo League lets you practise on a demo account.
Pipstone is not a broker and gives no financial advice. Trading involves risk of loss.
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