Free calculator
Forex Margin Calculator
Leverage lets a small deposit control a big trade. This tool shows how much of your money is set aside, and how big the trade really is.
- Forex
- Gold
- Indices
Set the contract size to match your market. Forex lots are 100,000 units; check your broker for gold and index contract sizes.
This is the money your broker locks up while the trade is open. If the trade closes at breakeven, this money comes back to you.
Your exposure is more than 20x your account balance. A 5% move against you would wipe out your account. The desk caps exposure at 5-10x for intraday and 2-3x for swings. Size down.
For learning and planning. The numbers are math on what you type, not a prediction.
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What is margin in forex?
Margin is the deposit your broker sets aside while a trade is open. It is not a fee. You get it back when the trade closes, plus or minus your result.
Leverage does not change how much you win or lose per pip. It only changes how little money you need to open the trade. That is why big leverage makes it easy to trade too big.
The formula in plain words
- Trade size in money = lots times units per lot times the price.
- Margin = trade size divided by the leverage number.
Notional = Lots × Contract size × Price Margin = Notional ÷ Leverage
Worked example
One standard lot of EUR/USD at 1.0950
- 1Trade size: 1 × 100,000 × 1.0950 = $109,500.
- 2At 1:30 leverage: $109,500 ÷ 30 = $3,650 of margin.
- 3At 1:50 leverage: $109,500 ÷ 50 = $2,190 of margin.
The trade controls $109,500 either way. Higher leverage only lowers the deposit, from $3,650 to $2,190.
Common mistakes
- Thinking margin is the most you can lose. You can lose more than the margin on one trade.
- Using all the leverage a broker offers. The limit is a ceiling, not a target.
- Ignoring free margin. If losses eat it up, the broker may close your trades for you, called a stop out.
Questions people ask
What is a margin call?
It is a warning that your account is running low compared with the margin your open trades need. If it keeps falling, many brokers start closing trades.
Does more leverage mean more profit?
No. Profit and loss per pip come from your lot size. Leverage only lets you open a bigger size with less money, which also means bigger losses.
Why are leverage limits different by country?
Regulators set them. Your broker's rules depend on its license and where you live, so check the broker's own terms.
Learn the idea behind it
The calculator does the math. These free lessons explain when and why to use it.
- Grade 1Market BasicsWhat a market is, how a currency pair works, and what pips, lots and spreads mean. Plus a first look at crypto and stocks.
- Grade 9Broker SmartsHow brokers work, what they charge, who regulates them and how to check one.
Quick answers
Words to know
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Demo first. Trading has risk of loss. Education, not financial advice.