Forex Margin Calculator: Leverage Explained in Plain English
Leverage lets a small deposit control a large position. This calculator shows the margin a trade ties up and, more importantly, how leveraged your whole account really is.
Margin is the deposit your broker holds to open a leveraged position: margin = position size divided by leverage. A $30,000 position at 30:1 leverage needs $1,000. Leverage does not change how much you should risk; decide the risk in money first, then size from the stop.
Margin & leverage calculator
Margin = position value ÷ leverage. Effective leverage = position value ÷ account balance, and it's the number that tells you how exposed you really are.
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See what the desk does →Margin vs leverage
Leverage is the ratio your broker allows, such as 1:30. Margin is the deposit set aside to open a position: position value ÷ leverage. One standard lot of EUR/USD at 1.1000 is worth $110,000; at 1:30 the margin is about $3,667.
Effective leverage: the number to watch
Broker leverage is only the maximum. What matters is effective leverage: total position value ÷ account balance. A $10,000 account holding one lot of EUR/USD ($110,000) is 11x leveraged, whatever the broker allows. Higher effective leverage means each percent the market moves is a bigger percent of your account.
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Play free, no signup →Margin level and margin calls
Margin level = equity ÷ used margin × 100%. If losses push it below your broker's threshold, you'll get a margin call; below a lower threshold, the broker may start closing positions automatically (a stop-out). Thresholds vary by broker and region, so check your account terms.
Leverage limits by region
Many regulators cap retail leverage. In the EU and UK, for example, major forex pairs are commonly capped at 30:1 for retail clients, with lower caps for other assets. Prop firms and offshore brokers often offer more, but more available leverage doesn't change how much you should risk.
Frequently asked questions
How is forex margin calculated?
Margin equals the position's value divided by the leverage. One lot of EUR/USD at 1.10 is worth $110,000, so at 1:30 leverage the margin is about $3,667.
What leverage should a beginner use?
Effective leverage matters more than broker leverage. Many beginners keep total exposure low and size every trade from a small, fixed risk per trade.
What is a margin call?
A warning that your equity has fallen close to the margin needed to keep positions open. Below the stop-out level the broker can close positions automatically.
Does higher leverage mean more risk?
Higher available leverage lets you open bigger positions. Risk rises only if you actually trade bigger, which is why position size and stops decide risk.
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