I am a newbie in Forex and take a 1:200 leverage for my account. i've a deposit of $300. now what should be my margin call?
Can anyone explain this thing consider my deposit:
what is margin?
what is free margin?
what is margin level?
To calculate margin you have to use formula:
cost/ 100 - (xx% of margin) x 100= price
Leverage is 200 (i.e. 200:1)
If trading a USDxxx pair:
Margin = StandardLot * LotSize / Leverage
Example (trading 0.1 lots of USDJPY):
Margin = 100,000 * 0.1 / 200 = 50 USD set aside as margin (used margin).
If trading a xxxUSD pair:
Margin = StandardLot * quote * LotSize / Leverage
Example (trading 0.5 lots of GBPUSD @ 1.3982):
Margin = 100,000 * 1.3982 * 0.5 / 200 = 349.55 USD.
more information you can check here:- Margin Calculation Formula | Forex Software Solutions
First of all, Margin calls are determined by brokers so yours should be with your broker,find out from them what percentage it is from their online chat support.
2, Margin is Margin is the amount of the money that participates in a position or trade and is based on your leverage , so using your leverage 1:200, let assume you open 1lot of EURUSD you will need a Margin of 552.42 USD
3.Free margin is the difference of your account equity and the open positions’ margin: so
Free Margin = Equity – Margin
With your deposit $300 lets assume you have some open positions with your total margin as 552.42 USD and your positions are $400 in profit
Equity =$300+400 = $700(Equity is your account balance plus the floating profit/loss of your open positions)
Free margin =700-552.42 =147.58
3.Margin level is the ratio of equity to margin:
Margin Level = (Equity / Margin) x 100
So: 700/552.42 * 100
Ask your broker for their trader calculator, these calculation should be simple using them.Goodluck
Thats was the simplest thing to have done and its even stated in Valuefx posts
Margin level is the amount that has to be maintained by trader with their brokers in order to trade in stock market. It is mandatory to maintain.
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