Free trader tool
Margin & Leverage Calculator
What the broker locks, what you have left, the leverage you are actually running, and the exact adverse move that force-closes you. Forex, gold, indices and crypto.
1 standard lot = 100,000 units of the base currency.
- Position notional
- $110,000
- Free margin left
- $6,333
- Margin requirement
- 3.33% of notional
Notional ÷ balance. This — not the broker's cap — is the leverage you are actually running.
- Loss before stop-out
- $8,167
- Adverse move that triggers it
- 7.42%
- Max size at 1:30
- 2.73 lots
Margin says what you can open. It never says what you should.
Backtest the size you actually intend to trade, candle by candle — free, no card.
Backtest it free →How margin is calculated
One formula: required margin = notional ÷ leverage. Notional is the face value of what you control — size × contract units × price.
One standard lot of EURUSD at 1.10 is 100,000 × 1.10 = $110,000 of notional. At 1:30 the broker locks $3,666.67 of your balance. At 1:100 the identical trade locks $1,100. At 1:500, $220.
That money is not spent. It is a deposit, held while the position is open and returned in full when you close — win or lose. Which is precisely why the margin number tells you almost nothing about the risk you just took.
Margin is not risk. They are not even related.
This is the confusion that costs retail traders the most money, so it is worth being blunt about it.
Margin is what the broker holds. Risk is what you lose if you are wrong. A 1-lot EURUSD trade with a 25-pip stop risks $250. That is true at 1:30 and it is true at 1:500. The leverage changed the deposit from $3,666 to $220; it did not move the loss by a cent.
So when someone says leverage blew their account, the mechanism was never the leverage itself. High leverage removes the barrier to opening a position that is far too big for the balance. The damage is done by the size. Leverage just stopped anything from getting in the way.
The practical version: decide the size from your stop distance and your risk budget using the position size calculator, then come back here to check you can actually open it. That order round — risk first, margin second — is the whole discipline.
Effective leverage: the number that actually describes you
Brokers advertise a leverage cap. It is a ceiling, not a description of your trading. The number that describes your trading is effective leverage = total notional ÷ account balance.
A $5,000 account holding one standard lot of EURUSD at 1.10 controls $110,000. That is 22× effective leverage whether the account is capped at 1:30 or 1:500. And 22× means a 4.5% adverse move in EURUSD wipes the account out entirely — a move the pair makes over a few weeks routinely.
Rough bands, in the absence of any universal rule:
- Under 5× — conservative. Ordinary volatility cannot threaten the account.
- 5× to 20× — normal for an active retail trader running real stops.
- Over 20× — a routine daily range is now in reach of your stop-out. On gold and indices this arrives far sooner than on forex majors, because their daily ranges are a much bigger share of price.
The calculator surfaces effective leverage more prominently than the margin figure on purpose. It is the one output on this page that predicts anything.
Margin requirement by leverage
Margin locked for one standard lot, at the example prices used in the calculator — EURUSD at 1.10 ($110,000 notional) and gold at $2,400 per ounce across a 100-ounce lot ($240,000 notional).
| Leverage | Margin % | 1 lot EUR/USD | 1 lot gold |
|---|---|---|---|
| 1:30 | 3.33% | $3,666.67 | $8,000.00 |
| 1:50 | 2.00% | $2,200.00 | $4,800.00 |
| 1:100 | 1.00% | $1,100.00 | $2,400.00 |
| 1:200 | 0.50% | $550.00 | $1,200.00 |
| 1:500 | 0.20% | $220.00 | $480.00 |
Note what the table does not change: the loss on a 25-pip stop is $250 in every row.
Margin call and stop-out — what actually happens
As a position moves against you, equity falls while the margin requirement stays put. The ratio between them is your margin level. Two things happen on the way down:
- Margin call — a warning, typically when equity reaches 100% of used margin. Some brokers email you. Some do nothing at all.
- Stop-out — the broker force-closes positions, typically at 50% of used margin, though it runs from 20% to 100% depending on who you trade with. Usually the largest losing position goes first.
The stop-out does not consult your stop loss, your analysis, or your conviction. The calculator shows the dollar loss and the percentage move that reach it, so you can see whether an ordinary session could get there before your stop does. If it could, the position is too big — that is the entire diagnostic.
Prop firm accounts change the binding constraint
On a funded or evaluation account the broker's stop-out is almost never what fails you. The evaluation's own max daily loss and max drawdown breach far earlier — often at 4% and 8–10% of the starting balance, which on most sizings arrives long before margin becomes tight.
So run the margin check to confirm the trade is openable, then model the rules that will actually end the account with the prop firm challenge calculator, which simulates thousands of attempts against a challenge's specific drawdown rules.
What this calculator assumes
Worth stating plainly, because every margin tool online quietly assumes the same things:
- A USD-denominated account. On a euro or pound account the margin figure converts at the current rate.
- A single open position. Multiple positions pool their margin, and some brokers net hedged positions to a reduced requirement.
- No swap, commission or spread. All three eat free margin over a held position, so real headroom is slightly thinner than shown.
- Fixed leverage. Many brokers step leverage down as notional grows, and cut it around scheduled news and weekends. Check your own contract specs.
Treat the output as the optimistic case. Real headroom is a little less than the number.
Frequently asked questions
How is required margin calculated?
Required margin = position notional ÷ leverage. Notional is size × contract units × price. One standard lot of EURUSD at 1.10 is 100,000 × 1.10 = $110,000 of notional; at 1:30 leverage the broker locks $3,666.67. At 1:100 the same trade locks $1,100.
What is the difference between margin and risk?
Margin is a deposit the broker holds while the trade is open — you get it all back when you close. Risk is the money you actually lose if the stop is hit. They are unrelated numbers, and confusing them is how traders end up opening a position ten times larger than they intended. Margin tells you what you can open; your stop distance tells you what you should.
What is free margin?
Balance minus the margin currently locked by open positions, adjusted for floating profit and loss. It is the buffer that absorbs losses before the broker starts force-closing. Free margin falling toward zero is the warning; the margin call and stop-out come after.
What is a stop-out level?
The point where the broker force-closes your positions to stop the account going negative — normally when equity falls to 50% of the margin in use, though it ranges from 20% to 100% by broker. It is not a choice you get to make, and it does not wait for your stop loss.
What is effective leverage, and why does it matter more than the broker's cap?
Effective leverage is your total position notional divided by your account balance. A $5,000 account holding one standard lot of EURUSD at 1.10 controls $110,000 — that is 22× effective leverage, regardless of whether the broker advertises 1:30 or 1:500. The advertised cap is a ceiling; effective leverage is what you actually chose. It is the number that predicts whether an ordinary 2% move ends your account.
Does higher leverage increase my risk?
Not directly — and this is the most misunderstood point in retail trading. Leverage sets the size of the deposit, not the size of the loss. A 1-lot EURUSD trade with a 25-pip stop loses $250 at 1:30 and $250 at 1:500. What high leverage does is remove the barrier to opening a position far too large for the account, which is why the outcomes look identical to leverage causing the damage.
How much leverage should I actually use?
Look at effective leverage rather than the cap. Under 5× is conservative, 5–20× is normal for an active retail trader running proper stops, and past 20× ordinary daily volatility starts being able to reach your stop-out. Gold and indices reach those numbers far faster than forex majors because their daily ranges are a much larger share of price.
Do prop firm accounts work the same way?
Mostly, but the binding constraint is different. Prop evaluations impose a max daily loss and a max drawdown that will breach long before the broker's stop-out is anywhere near — so the margin figure is almost never what fails you. Model the drawdown rules instead with the prop firm challenge calculator.
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