Courses > Platforms > MetaTrader 5 (MT5)
How to Manage Margin in MetaTrader 5 (MT5)?
Margin is the capital required to open and maintain positions, making it a crucial aspect of effective trading account management. Here are several strategies to manage margin in MetaTrader 5 (MT5) and avoid unexpected losses or margin calls:
- Understand Your Margin Requirements: Every trade has a specific margin requirement that varies depending on the asset and the leverage applied. In MT5, the platform automatically calculates the required margin when you place an order. For example, with 1:100 leverage, a $1,000 trade requires only $10 in margin. Familiarizing yourself with these requirements helps prevent overextending your account.
- Monitor Free Margin and Margin Level: Free margin refers to the available funds for opening new positions and absorbing losses. You can view this information in the “Terminal” window under “Trade.” The Margin Level, expressed as a percentage, indicates your account's health and is calculated as (Equity / Used Margin) x 100%. A low margin level (typically below 100%) may trigger a margin call, requiring you to either add funds or close existing trades.
- Limit the Number of Open Positions: Each open position consumes part of your margin, so holding multiple trades at once can quickly deplete your free margin. To maintain balance, consider limiting the number of trades you keep open simultaneously.
- Adjust Leverage Wisely: Higher leverage reduces margin requirements but also increases risk. In MT5, selecting a leverage level that aligns with your risk tolerance can help sustain a healthier margin level.