To avoid margin calls and ensure your account remains in good standing, it's essential to maintain a margin level above 150%. Overleveraging can lead to your account being flagged for a potential breach. Below, we'll guide you through the calculation process using your account equity, the instrument's leverage, current price, and contract size.
We've included two examples - one for a $30,000 account and another for a $120,000 account - to demonstrate how to stay above the 150% margin level.
This is your current balance, including any floating profits or losses from open positions.
To ensure you stay above the 150% margin level, use this formula to determine how much of your equity can be used for opening positions:
This ensures that your account retains a buffer above the 150% margin level, leaving room for market fluctuations without triggering a margin call.
Leverage on our platform depends on the asset class:
Check the latest price for the asset you want to trade, such as EUR/USD, Gold, or Bitcoin.
Use this formula to determine the maximum lot size you can trade without dropping below the 150% margin level:
2. Max Lot Size:
Since one standard lot in Gold represents 100 ounces, with $30,000 equity, you can trade up to 1.11 standard lots (or 111 ounces) of Gold without dropping below the 150% margin level.
With $120,000 equity, you can trade up to 5.33 lots on the US100 index without dropping below the 150% margin level.
Keeping your margin above 150% ensures you have enough free margin to withstand market fluctuations. Dropping below this level may trigger margin calls or lead to your account being flagged for a potential breach.
Your account may be flagged for a breach if your margin level falls below 150%. Continued decline could lead to forced liquidation of positions. Our risk team will review your account, which may result in a payout denial, reset to Phase 1, or a hard breach. As a firm focused on long-term sustainability, this process ensures that our funded traders align with the risk profile of the trades we want to send to the live market.
Higher leverage allows you to control larger positions with less margin, but it also increases your exposure to market risk. Proper lot size management is crucial to avoid overleveraging and maintaining a healthy margin level.
Leverage on our platform varies by asset class:
Monitor your equity and margin levels regularly, adjusting your lot size if necessary. If your equity changes due to floating profits or losses, recalculate your maximum lot size. You can use the formula we provided or an online margin calculator.
It's important to note that opening multiple positions simultaneously (often called layering a position) can still constitute overleveraging, even if individual trades stay within the margin limits. The total exposure from all positions should be factored in to avoid exceeding the 150% margin requirement.