Calculate Forex Margin
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How to calculate margin?
1) If USD is the base currency (USDCHF, USDJPY, USDCAD):
Margin = $100 000 x lot size / leverage
For example, if you open 0.3 lot of USDCHF with the leverage 1:100, the following margin will be required:
$100 000 x 0.3 / 100 = $300
The leverage 1:200, Margin = $100 000 x 0.3 / 200 = $150
However, if you are using the hedging feature (hedging means that you are opening 2 orders of the same currency pair: 1 order to buy and 1 order to sell), then margin is not required for 2 orders.
For example, if you are opening buy 0.04 lot of USDCHF, you margin will be $40. If afterwards you are opening sell 0.05 lot of USDCHF, your margin will change to $50. All in all margin for these 2 orders will consist only of $50 but not of $90 ($40 + $50).
2) If USD is the quote currency (EURUSD, GBPUSD) the required margin will be always different.
Margin= current quote × lot size x $100 000 / leverage
For example, if you open 0.05 lot of EURUSD with a current quote 1.2706 with the leverage 1:100, the following margin will be required:
1.2706 x 0.05 x 100 000 / 100 = $63.53
The leverage 1:200, Margin = 1.2706 x 0.05 x 100 000/200= $31.76
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How to calculate pip?
1) If USD is the quote currency, e.g. EURUSD:
(Units: 1 lot = 100 000, 0.1 lot = 10 000, 0.01 lot= 1000)
1 pip = 0.0001 x units2) If USD is the base currency, e.g. USDCHF:
1 pip = 0.0001 x units/quote
3) If it is a cross currency pair, e.g. EURGBP:
1 pip = 0.0001 x units x quote currency quote (GBPUSD)
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How to calculate equity?
Equity = Balance + Floating Profit – Floating Loss
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How to calculate margin level?
Margin Level = (Equity/Margin) x 100
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