High leverage. A 5-10% adverse move could seriously damage your account. Reduce position size or use a tighter stop.
Price movement against position that triggers these levels (approximate)
How to Use This Calculator
Select your instrument and enter the current price. The price determines the notional value of your position.
Set your trade size and lot type. Choose standard, mini, or micro lots to match your planned position.
Choose your leverage ratio. Higher leverage reduces margin required but amplifies both gains and losses.
Enter your account balance to see your free margin, margin level, and how far the market can move before a margin call.
Key Terms and the Margin Formula
Margin Required: The deposit your broker locks to open the position. Not a fee — released when you close.
Notional Value: The full market value of your position. 1 standard lot of EUR/USD at 1.0850 = $108,500.
Free Margin: Account balance minus used margin. The capital available for new trades.
Margin Level: (Equity ÷ Used Margin) × 100. Drops toward 100% as losses accumulate; margin call triggers at 100%.
Effective Leverage: Total position value ÷ account balance. Your true exposure regardless of broker leverage setting.
Example: EUR/USD 1 std lot at 1.0850, leverage 1:100
- Notional = 100,000 × 1.0850 = $108,500
- Margin = $108,500 ÷ 100 = $1,085
- On a $10,000 account: Free Margin = $8,915, Margin Level = 922%, Effective Leverage = 10.85:1
Leverage Risk by Effective Leverage
| Effective Leverage | Move to Wipe Account | Risk Level |
|---|---|---|
| 1:2 | 50% | Very Low |
| 1:5 | 20% | Low |
| 1:10 | 10% | Moderate |
| 1:20 | 5% | High |
| 1:50 | 2% | Very High |
| 1:100 | 1% | Extreme |
Major pairs move 1-2% per day. News events can move 3-5% in minutes. Effective leverage above 20:1 puts your account at risk from a single news release.
How to Reduce Margin Risk
Trade smaller positions. If the calculator shows high effective leverage, reduce lot size until you are below 10:1.
Always use stop-losses. A stop limits your potential loss and protects your margin from large adverse moves.
Maintain a larger account buffer. More equity means a higher margin level and more room before a margin call.
Reduce exposure before high-impact news. Before NFP, FOMC, or major events, close or reduce positions to avoid volatility-driven margin calls.