MetaTrader 4 Indices Trading Margin Level Percentage Calculation
Margin Level Indices Trading Calculation - MT4 Indices Trading Margin Level Percentage Calculator - Calculating Indices Margin Examples in MetaTrader 4.
This learn indices trading tutorial will explain What is Indices Trading Margin Requirement in stock indices trading and how it is calculated on MetaTrader 4 software.
Margin Level Indices Trading Calculator
If indices 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 indices trading capital is $1,000 after stock indices leverage you control $100,000 - $1,000 is what percent of $100,000 - it is 1%) that is your indices trading margin requirement for your stock indices trading account.
The indices margin examples on MetaTrader 4 indices Platform below, the set stock index trading leverage is 100 : 1, the indices trading margin which is 1% is $2683.07, therefore the total amount controlled by indices trader is: $268,307 - this is because with this leverage the trader has used little of his money and borrowed the rest, 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 Indices Trading Leverage is 100:1
When trading if you have $1,000 & use option 100:1 and buy 1 Mini lot for $10,000 your margin on this transaction is $1000 dollars in your indices trading Mini stock indices trading 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 indices trades automatically once your $1,000 has been taken by stock indices trading market.
But this is if your indices broker has set 0% Indices Trading Margin Requirement before closing your stock indices trades automatically.
For 20% margin requirement before closing your stock indices trades automatically, then your trade transactions will be closed once your account balance gets to $200
For 50% margin requirement of this level before closing your stock indices trades automatically, then your trades will be closed once your trade account balance gets to $500
If your index 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 pips spread your account balance will get to $990 and the needed percentage is 100% i.e. 1,000 dollars, therefore your trade orders will immediately get closed out.
Most brokers do not set 100% requirement, but there are those brokers who set 100% are not suitable for you at all, choose those set 50% or 20% margin requirements, in fact, those indices brokers that set at 20% are some of the best because the likely hood they close-out your trade is reduced as displayed in the example above.
MetaTrader 4 Indices Trading Margin Level Percent Calculation
In the above MT4 indices trading screenshot example, the trader is using $2683.07, total controlled amount is $268,307, but indices account equity is $16,116.55, therefore used stock index 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 Indices Platform will display this as "Indices Trading Margin Requirement", This will be displayed as a percentage 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 indices trading leverage
If stock index trading leverage is 100:1 and you transact 10 Mini Lots, equals to $100,000
$100,000 dollars divide by 100:1, used capital is $1000
Calculation:
= Capital Used * Percent(100)
= $1,000/$1000 * Percentage(100)
Indices Margin Requirement = 100%
Investor has 80% above required margin level amount
Using 10:1
If stock indices leverage is 10:1 & you transact 1 Mini Lot, equals to $10,000
$10,000 dollars divide by 100:1, used capital is $100
Calculation:
= Capital Used * Percent(100)
= $1,000/$100 * Percentage(100)
Indices Trading Margin Requirement = 1000 %
Investor has 980% above required margin level amount
Using 1:1 indices trading leverage
If stock indices leverage is 1:1 and you transact 0.1 Mini Lot, equals to $1,000
$1,000 dollars 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
