What’s Leverage and Margin? (MT5 Step-by-Step + Tiny Instance)
Abstract
Leverage permits you to management a big place with a small deposit.
Margin is that deposit — the cash your dealer units apart to maintain your commerce open.
In MT5, realizing your leverage and margin helps you handle threat and keep away from margin calls.
Key Takeaways
Larger leverage = greater trades, but in addition greater threat.
Margin is the cash locked by your dealer whenever you open a commerce.
In case your losses get too massive, a margin name can shut your trades.
MT5 reveals your margin and free margin dwell within the Terminal window.
A – The Thought in Easy Phrases
Leverage is sort of a mortgage out of your dealer that allows you to commerce greater than you may have.
In case you have $100 and leverage 1:100, you’ll be able to management $10,000 out there.
Margin is the a part of your cash that’s locked as a assure for that commerce.
The remainder of your steadiness is named free margin — cash you’ll be able to nonetheless use for brand spanking new trades or to soak up losses.
An excessive amount of leverage can wipe out your account rapidly if the market strikes in opposition to you.
B – MT5 Steps to Verify Leverage and Margin
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Open MT5 and log in to your account.
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Go to the Terminal window (Ctrl+T).
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Click on the Commerce tab.
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Search for:
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Stability (whole funds)
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Fairness (Stability ± open commerce income/losses)
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Margin (cash locked for open trades)
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Free Margin (Fairness – Margin)
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Margin Stage (% = Fairness ÷ Margin × 100)
Your account leverage is ready by your dealer — you’ll be able to test it in your account particulars.
C – Fast Instance with Numbers
You’ve gotten:
Required Margin = 100,000 ÷ 100 = 1,000 EUR (~$1,000 USD)
|
Time period |
Worth |
|
Stability |
$1,000 |
|
Place Dimension |
$100,000 |
|
Leverage |
1:100 |
|
Margin |
$1,000 |
Right here, your complete steadiness is used as margin — no free margin left for extra trades.
D – Widespread Errors & Fixes
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Utilizing an excessive amount of leverage → Use smaller lot sizes to scale back threat.
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Not checking free margin → At all times preserve some free margin to deal with losses.
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Complicated margin with charges → Margin shouldn’t be a price; it’s a locked deposit.
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Ignoring margin degree % → If it drops too low, you threat a margin name.
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Buying and selling a number of pairs with out monitoring margin → Can rapidly over-leverage you.
E – If You Use My Instruments (Optionally available)
A few of my MT5 indicators show margin degree, free margin, and threat per commerce instantly in your chart.
Mini-Glossary
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Leverage: A ratio exhibiting how a lot bigger your trades are in comparison with your capital.
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Margin: Cash put aside by your dealer whenever you open a commerce.
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Free Margin: Fairness minus margin — cash nonetheless obtainable for buying and selling.
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Margin Stage: Fairness ÷ Margin × 100.
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Fairness: Your steadiness plus or minus open commerce outcomes.
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Stability: Complete cash in your account (no open trades).
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Margin Name: Dealer motion when your margin degree is just too low.
Guidelines
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Know your account leverage.
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Verify margin earlier than opening trades.
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Preserve free margin obtainable.
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Watch margin degree % to keep away from margin calls.
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Use smaller positions if threat feels too excessive.
Comply with the trades & updates on MQL5 → https://www.mql5.com/en/channels/issam_kassas
