If you trade on MetaTrader 4, it’s essential to understand how to calculate the required margin and leverage for each instrument. This will help you manage your risk better and make the most of your available capital.
What is margin in MetaTrader 4?
📌In MetaTrader, margin requirements are expressed as a percentage of the nominal value of your trade. This percentage represents the amount reserved as collateral in your account when you open a position.
Practical Example: EURUSD
Let’s say you want to open a trade on EURUSD with a volume of 1 lot at a price of 1.18250.
Step-by-step calculation:
1 lot = 100,000 units of the base currency (euros in this case)
Nominal value = 1.18250 × 100,000 = USD 118,250
Margin required (0.1%) = 0.001 × 118,250 = USD 118.25
➡️ This means you only need USD 118.25 as collateral to trade one full lot of EURUSD.
How to determine maximum leverage?
You can convert the margin percentage into leverage using this formula:
Leverage = 100 / margin percentage
In our example:
100 / 0.1 = 1000
➡️ So the leverage is 1:1000
Margin calculation formulas by instrument type
📘 Direct Quote Pairs (EURUSD, GBPUSD, etc.)
Current Price × Volume / Leverage
📙 Inverse Quote Pairs (USDJPY, USDRUB, etc.)
iniCopiarEditarMargin = Volume / Leverage
📗 Cross Currency Pairs (EURJPY, EURRUB, etc.)
Current Price × Volume / Leverage / Price of Quoted Currency
Stocks and indices
For stocks and indices, the calculation is different. Use this formula:
(Margin requirement %) × Volume of shares × Instrument price