Margin Calculator Instructions
Input
Product：Choose the type of commodity to trade, whether it’s stocks, futures, or forex.
Currency：Choose the currency of your account.
Leverage Ratio：Enter your leverage ratio.
Lots Size：Enter your lot size.
Price：Enter the current price of the trading commodity.
Result
- Required Margin：Display the amount of margin required to establish a position now.
What is Leverage？What is Margin？
Leverage trading allows traders to operate larger trading positions with less capital (i.e., margin). This can amplify profits, but it can also magnify losses. This type of trading is also known as margin trading.
The function of leverage is to amplify potential profits and losses. For example, if you buy EUR/USD at a price of 1.0000 without using leverage, then to bear all the losses, the price must drop to zero, or to double your investment, the price must rise to 2.0000. But if you trade with a leverage of 1:100, then a price change of only 1% will generate the same profit or loss.
Margin is the funds traders must pay when opening a new position. It’s not a trading cost or fee and is refunded after the trade. Its purpose is to protect brokers from losses. When losses reduce a trader’s margin below a predetermined stop-loss percentage, the broker will automatically close one or all open positions. Brokers may or may not issue a margin call warning before such liquidation.
How does Leverage Work?
Use 100：1 with leverage, the size of the position a trader can open is 100 times the size without leverage. For example, if the cost of opening a 0.01 lot EUR/USD trading position is $1,000 (without leverage), and the broker provides. 100：1 of leverage, then the trader only needs to use 10 dollars as margin. Of course, traders can also choose to use lower leverage, such as 30 ：1 or 5：1 , or even choose not to use leverage.
Note: The higher the leverage ratio, the greater the risk. Most professional traders choose to use a lower leverage ratio, up to 5：1, or not use leverage at all, keeping the risk percentage of each trade at a moderate level (for example, 2%).
The higher the leverage ratio, the greater the risk. Most professional traders choose to use a lower leverage ratio, up to 5:1, or not use leverage at all, keeping the risk percentage of each trade at a moderate level (for example, 2%).