Enter your account balance and position size to see your effective leverage and how much margin you are using.
Your effective leverage is the total value of your open positions divided by your account equity. A 100,000 USD position on a 5,000 USD account is 20 times leveraged. This is different from the maximum leverage your broker offers, which is only a ceiling. Effective leverage shows how much risk you are actually taking, and it falls as you add equity or close positions.
The broker holds margin equal to the position value divided by its maximum leverage. The rest of your equity is free margin. The margin level is equity divided by margin used, as a percentage. Brokers usually send a margin call when it falls to a set level, such as 100%, and close positions by force at a lower level, such as 50%.
Many traders keep effective leverage low, often below 10 times, even when the broker allows 100 or more. At 20 times leverage, a 5% move against you wipes out the whole account. Use the table to see how the margin changes with the broker leverage, and size positions so that a normal run of losses cannot reach a margin call.
Divide the total value of your open positions by your account equity.
Leverage is the maximum your broker allows. Effective leverage is what you actually use, based on your positions and equity.
It is equity divided by used margin, shown as a percentage. A low margin level means you are close to a margin call.
There is no single answer, but many traders keep effective leverage under 10 times to survive normal swings in the market.
The broker maximum does not change your risk. Your position size does. Higher broker leverage only makes it easier to open very large positions.
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