Forex Margin Level Calculator
The FOREX MARGIN LEVEL CALCULATOR is an advanced tool which determines the use of leverage for your selected positions, and helps you understand the level of exposure on your account. As we have discussed, with the use of leverage you may incur considerable losses. To ensure that you can maintain your position opened, you need to keep the use of leverage at normal levels. Let us take a look at an example to see how the forex margin level calculator works.
Let us say that the EUR/USD is trading at 1.2200, and you have USD 5,000 as your account balance. If you open a trade of EUR 100,000 at 1.2200, this means that 0.01 is the amount in millions, and your open price is 1.2200. We also use the maximum leverage of 100. If after one hour, the EUR/USD is trading at 1.2239, this price will be the market price. From here you can calculate your P&L which will be USD 39 in this example. This is because you have bought a mini lot where 1 pip is worth 1 dollar. In this case the use of leverage is at a normal level of 2.42.
However, let us have a look at how this follows out if you buy EUR 100,000 other things remaining unchanged. This means that you are now USD 390 in profit but the use of leverage is at an abnormal level of 22.67! It is true that you are gaining in large profits but don’t forget leverage is a double-edged sword! You might well be on the losing side, and in fact a very large majority of new traders with poor trading skills and money management will find themselves in this situation.
Additionally, the forex margin level calculator provides you with the hypothetical rate at which the potential margin call might occur. If you want to add more positions you can do so by clicking on the add position button. So to use this calculator, just follow these simple steps:
- Select your account balance,currency and leverage.
- Insert required parameters of trades. Click “Add position” to add more trades into the calculator.
- To get the current market prices click “Load market prices”. This will automatically update the market prices.
- Click calculate to get the results for Margin Level, Margin Call rate, and P&L.
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Disclaimer :The above is provided for information purposes only.