Demo Account Guide
Demo Account Guide
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Maximum Margin Level Recommendation


Javiero Deon

Nov 9 2019 06:37

What is the maximum recommended margin level so that we can be safe from floating? 


Daniel Robson

Nov 10 2019 05:53

Hi Javiero Deon,
There is no maximum limit. If you want to play floating, which means that most likely you don't use a stop loss, I think you should keep the margin level at least =200%, assuming your broker sets the margin call level=100%. So keep it at least 2 times the margin call level to be safe.

Playing in a floating way is not safe, so you should limit your risk by using stop losses. Unless the funds are large, choose the greatest possible leverage and enter a small lot size, so that you can hold thousands or even tens of thousands of pips. Well, if this is the case and you can float for a long time (maybe months), then what's the point of trading?


Vincent Martínez

Nov 12 2019 11:46

What is the safe margin in the percentage?


Daniel Robson

Nov 14 2019 04:51

Hi Vincent Martínez,
If you mean margin, not margin level (or margin call level), then the margin is not measured in percent but is determined by the leverage you chose when opening an account. Margin is the number of funds you must be deposit to open a trading position. The amount of margin depends on the contract size and leverage you choose. The contract size or value in the forex for 1 lot is USD 100,000.

If you choose 1:100 leverage then your guarantee fund is 1% of the contract value, for 1:200 leverage the guarantee fund is 0.5% of the contract value, and for 1: 500 it is 0.2%. The margin calculation if you are trading on the XXX / USD currency pair (EUR / USD, GBP / USD, AUD / USD or NZD / USD) is:

Margin = (USD 100,000) x (number of lots or volume) x (percentage margin) x current market price. For example: You are trading with 1: 200 leverage, you buy 0.2 lot EUR / USD at a price of 1.1950, then the margin = (USD 100,000) x 0.2 x 0.5% x 1.1950 = USD 119.50. The funds amounting to USD 119.50 will be held as long as your position is still open (not closed).

If you get a margin call before the position is closed, the remaining funds will be equal to that margin. With greater leverage, the guarantee fund (margin) will be smaller, so that if you are hit by a margin call, the remaining funds will also be smaller. So the amount of margin has nothing to do with security in trading.


Vincent Martínez

Nov 19 2019 03:43

Hemmm...I see.

Thanks a lot, sir, that's really helped me.