One of the most important things to understand when trading with Metatrader 4 is how to call the collate margin. Margin, or leverage, is a way for traders to increase their buying power with small capital. With a margin, traders can significantly improve their potential profits (or losses!) from a trade. Calculating the margin in Metatrader 4 is relatively easy and quick, so let’s look at it now.
How to Calculate Metatrader 4 Margin?
To calculate Metatrader 4 margin, multiply position size units and price and divide with leverage. For example, if you BUY 1 lot EURUSD with 1:500 leverage and the price is 1.06, then your margin will be :
1.06*100,000/500 = $212
The formula to calculate the margin for forex pairs is:
Let us see another example of calculating margin in Metatrader if the price is 1.06 and leverage 1:100, and I bought 1 mini lot.
10 000 (mini lot size) * 1.06 (the current price) = 10,600 USD
Next, determine the required margin based on the leverage provided by the broker. In this case, the leverage is 1:100, which means that the margin required to open a position is 1% of the total position size. Therefore, the required margin for a 1 mini lot position is:
10,600 / 100 = 106 USD
So, the required margin for this trade is 106 USD.
Precious Metals Margin in Metatrader
Required Margin = Volume * Contract Size * Open Price / Leverage
Example: 1 lot XAUUSD: 1 * 100 * 1800 / 500 = $360
Stocks/Equity CFDs Margin in Metatrader
Required Margin = Volume * Contract Size * Open Price * Margin %
Example: 1 lot AAPL: 1 * 100 * 44 * 0.05 = $220
First, it’s essential to understand that to use margin; you must have an account with a broker offering this feature. It is also necessary for the trader to be aware of the contract size for each currency pair they are trading, as this will determine how much margin they need for each trade.
In conclusion, calculating the margin in MT4 involves two key factors: the lot size and the leverage. To determine the required margin, you first need to calculate the value of the position size in the base currency of the trading account based on the current market price.
Next, you need to determine the required margin based on the leverage provided by the broker, which is usually expressed as a percentage of the total position size. MT4 provides a margin calculation tool that can be used to quickly and easily determine the required margin for a particular trade.
Remember that margin requirement vary depending on the broker, and the trading instrument being traded is essential. So, it’s always a good idea to double-check with your broker or consult the relevant documentation before placing trades.
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
Igor regularly publishes trading-related videos on the Fxigor Youtube channel.
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