Margin Calculator

for Forex and Gold Trading

For beginners who are wondering how margin is related to leverage, try reading the content below.

What is margin for 'Forex' and 'Gold' trading?

Normally when we open a trading account with a broker, we have to choose Leverage.

For example,

• 1 : 100, read as 1 to 100
• 1 : 500, read as 1 to 500

Leverage is like a helper to increase the buying power that the broker gives us.

Many people might have heard the saying "Don't use a lot of leverage, your portfolio will break."

But in fact, Leverage is not the thing that makes our portfolio burst!

What causes our portfolio to burst is Over Trading. In simple terms, it means opening more orders than our portfolio can handle.

(It's like overspending, really.)

So why do some people blame high Leverage for causing their portfolio to burst?

It comes from the formula used to calculate the margin, which is used to open orders in trading.

Because it relates to the margin calculation formula.

Calculation formula:

Margin = Lot size * Contract Size * Current price / Leverage

Example of calculation:

Gold price is 2000 USD / Troy Ounce

The leverage (Lev) of the portfolio is 1:500

Contract size is 100

Want to open an order of 0.1 Lot

The margin = 0.1 * 100 * 2000 / 500

The answer is, it uses a margin of 40 USD.

In conclusion, high leverage can lead to a blown account if we have little money but open large lots. Be mindful before trading so as not to misplace the lot size. You can use high leverage, but you should calculate your Money Management before every trade.

For the Money Management Calculator (risk calculation),

Click here to calculate MM.

For those who don't want to do the calculations themselves all the time, you can use the margin calculator below.