MT4 Indices Trading Margin Level Percentage Calculation

Margin Level Trading Calculation - MT4 Indices Trading Margin Level Percentage Calculator - Calculating Margin Examples in MetaTrader 4.

This learn tutorial will explain What is Trading Margin Requirement in stock indices trading and how it is calculated on MT4 software.

Margin Level Trading Calculator

If 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 Trader'

(Simplify - your capital is $1,000 after leverage you control $100,000 - $1,000 is what percent of $100,000 - it's 1 percent) that is your margin requirement for your account.

The margin examples on MetaTrader 4 Platform below, the set leverage is 100 : 1, the margin which is 1 % is $2683.07, therefore the total sum controlled by trader is: $268,307 - this is because with this leverage the trader has used little of his money and borrowed the rest of the amount, with this set at 100:1, trader is using 1% of their trading capital, this 1 % equals to $2683.07, if 1% equals to $2683.07 then 100% is $268,307

MT4 indices margin level percentage calculator Examples

Now if Your Leverage is 100:1

When trading if you have $1,000 and use option 100:1 and buy 1 Mini lot for $10,000 your margin on this transaction is $1000 dollars in your trading Mini stock indices account, this margin is the money that you'll lose if your open trade transaction goes against you - the other $99,000 that is borrowed, the broker will close the open trades automatically once your $1,000 has been taken by market.

But this is if your broker has set 0 percent Indices Trading Margin Requirement before liquidating your stock trades automatically.

For 20% margin requirement before liquidating your stock trades automatically, then your trade transactions will be closed once your account balance gets to $200

For 50 percent margin requirement of this level before closing out-out your stock trades automatically, then your trades will be closed once your trade account balance gets to $500

If your broker sets 100% trading margin percent level requirement of this margin requirement level before closing your open trade positions automatically, then your opened trades will be closed once your trading account balance gets to $1,000: Meaning the trade transaction will closeout as soon as you execute the trade order because even if you pay 1 pip spread your trading account balance will drop to $990 and the needed percentage is 100% i.e. 1,000 dollars, therefore your trade orders will immediately get closed out.

Most brokers don't set 100% requirement, but there are those brokers who set 100% are not suitable for you at all, choose those set 50% or 20 percent margin requirement, in fact, those brokers that set at 20% are some of the best because the likely-hood they liquidate-out your trade transaction is reduced as displayed in the example above.

MT4 Indices Trading Margin Level Percent Calculation

In the above MT4 indices screenshot example, the trader is using $2683.07, total controlled amount is $268,307, but indices account equity is $16,116.55, therefore used trading leverage is ( $268,307 divide by 16,116.55 ) = 16.64 : 1

16.64 : 1 Used Indices Trading Leverage

The Margin is 600% which is 580% above the required 20% Margin requirement by the broker.

To know about this margin level which is calculated by your MT4 platform automatically - the MetaTrader 4 Platform will illustrate this as "Indices Trading Margin Requirement", This will be shown as a percent higher the percentage the less likely your trades are to get closed.

For Examples if - (using a broker that requires 20% margin requirement)

Using 100:1 trading leverage

If trading leverage is 100:1 and you transact 10 Mini Lots, equals to $100,000

$100,000 divide by 100:1, used capital is $1000

Calculation:

= Capital Used * Percent(100)

= $1,000/$1000 * Percent(100)

Indices Margin Requirement = 100%

Investor has 80% above required margin level amount

Using 10:1

If leverage is 10:1 and you transact 1 Mini Lot, equals to $10,000

$10,000 divide by 100:1, used capital is $100

Calculation:

= Capital Used * Percent(100)

= $1,000/$100 * Percent(100)

Indices Trading Margin Requirement = 1000%

Investor has 980% above required margin level amount

Using 1:1 trading leverage

If leverage is 1:1 and you transact 0.1 Mini Lot, equals to $1,000

$1,000 divide by 100:1, used capital is $10

Calculation:

= Capital Used * Percent(100)

= $1,000/$10 * Percent(100)

Indices Margin Requirement = 10,000 %

Investor has 9800% above required margin level amount