"Not enough money" error on MT5 demo account

[fawzysalah]

i have been using a demo account with a balance of 100,000 USD and was able to trade by instant market exceution without any problems.

But when i decreased the balance to 3,000 USD, it would give me a "Not enough money" error even if i used the lowest possible lot size (0.1) 

I tried placing a pending order , but when the actual price reached my target price, the order was rejected and i was taken out of the trade 

So why does this happen and how can i fix it ? A lot size of 0.1 means 1 dollar per pip so i should have enough margin to keep an open position.

Taking into account that the broker offers real accounts with a balance of just 100 $ 

[Fernando Carreiro]

fawzysalah: i have been using a demo account with a balance of 100,000 USD and was able to trade by instant market exceution without any problems. But when i decreased the balance to 3,000 USD, it would give me a "Not enough money" error even if i used the lowest possible lot size (0.1). I tried placing a pending order , but when the actual price reached my target price, the order was rejected and i was taken out of the trade. So why does this happen and how can i fix it ? A lot size of 0.1 means 1 dollar per pip so i should have enough margin to keep an open position.

Taking into account that the broker offers real accounts with a balance of just 100 $ 

You are not properly calculating your risk, taking into account balance, leverage and margin requirements. You also need to consider your stop-loss size when calculate your order volume and risk. You don't seem to be doing any of that and just using a fixed lot size for your orders.

[fawzysalah]

Fernando Carreiro #:

You are not properly calculating your risk, taking into account balance, leverage and margin requirements. You also need to consider your stop-loss size when calculate your order volume and risk. You don't seem to be doing any of that and just using a fixed lot size for your orders.

I did add a stop loss as shown in the attached photo of my pending order and it is not that far away from the set price.

I am also using 1:1 levrage and a lot size of 0.1 (1 USD a pip) so i think i am not risking a lot of my balance, right ?  

So if i have a 3,000 USD account with a trade lot size of 0.1 and a levrage of 1:1 , what should be the margin requirement ? 

[Dominik Egert]

Well, short answer here:

1 lot represents (in FX) usually 100.000 of the currency.

Therefore a leverage of 1:1 and a lot size of 0.1 will require a margin of 10.000 of your currency.

So if you would be using a leverage of 1:10 you would require a margin available of 1.000.

Therefore an account balance of 1.000 is still not enough.

Your broker has a margin call and a stop out level, which you need to maintain. If you are below this requirement, you either get your positions closed, or cannot open them in the first place.

[fawzysalah]

Dominik Christian Egert #:

Well, short answer here:

1 lot represents (in FX) usually 100.000 of the currency.

Therefore a leverage of 1:1 and a lot size of 0.1 will require a margin of 10.000 of your currency.

So if you would be using a leverage of 1:10 you would require a margin available of 1.000.

Therefore an account balance of 1.000 is still not enough.

Your broker has a margin call and a stop out level, which you need to maintain. If you are below this requirement, you either get your positions closed, or cannot open them in the first place.

Ok so i tried again with the 100,000 USD account with a leverage of 1:1 and a lot of 0.1 and it gave me a margin of 10,000 as shown in the photo , so if i used a balance of 3,000 with the same leverage and lot size , i should have a margin of 300 , right ? 

i also tried trading with a 3,000.09 balance , lot size of 0.1 but with a levrage of 1:10 and was able to place a trade with the following as shown in the second screenshot

Equity : 3,000.02

margin : 1,050.43

free margin : 1,949.77

Margin level (%) : 285.62

so the margin here is around 35% of the balance , so what is the equation to calculate the margin ? 

Thanks 

[Dominik Egert]

(Lot size * contract size) / leverage = margin.

Lot size is (in this case) 0.1

Contract size is (in FX usually) 100.000

Leverage is (in this case 1:10) 10

0.1 * 100000 = 10000

10000 / 10 = 1000

This requirement then gets "converted" from the symbols margin currency to your account currency, using always the most current quote.

That's how it is calculated.

[John Winsome Munar]

You have to consider your leverage, margin and the drawdown of your strategy.