What does margin level mean and how is it calculated?
Margin level is a key metric in trading that reflects the status of your account. It represents the ratio of your account equity to the used margin, expressed as a percentage. A higher margin level generally indicates a safer position, while a lower margin level may signal potential risks of margin calls or stop-outs.
The margin level is calculated using the following formula:
Margin level = (equity/used margin) * 100%
- Equity is the total funds in your account, including your deposits and any unrealized profits or losses from open positions.
- Used margin is the amount of margin currently being used to maintain your open positions.