The formula
Margin usage % = Margin in use ÷ Account balance (or equity) × 100
"Margin in use" means the margin of every open position added together, not only the trade you just opened. Whether you divide by balance or by equity depends on your firm. The rulebook usually says which one, and the difference matters more than people expect, as you'll see below.
To get the margin of a single trade:
Margin = Lots × Contract size × Price ÷ Leverage
At most brokers one lot is 100,000 units on currency pairs and 100 ounces on gold. Index CFDs vary a lot, so check the contract size of your NAS100 or US30 symbol once in the platform.
Example 1: a $10,000 account at 1:100
- 1 lot of EURUSD at 1.1400: 1 × 100,000 × 1.14 ÷ 100 = $1,140, which is 11.4% of the account.
- Add 0.5 lot of gold at 4,200: 0.5 × 100 × 4,200 ÷ 100 = $2,100.
- Total margin $3,240, so margin usage is 32.4%.
Plenty of room. At 1:100 you would struggle to reach an 80% limit with normal position sizes.
Example 2: a $15,000 funded account at 1:30
Now the same kind of trades on a funded account with lower leverage, 1:30 on currency pairs and gold and 1:20 on indices. The limit is 80% of $15,000, which is $12,000.
| Trade | Margin | Total margin | Margin usage |
|---|---|---|---|
| 0.5 lot gold at 4,200 (1:30) | $7,000 | $7,000 | 46.7% |
| 1 lot EURUSD at 1.1400 (1:30) | $3,800 | $10,800 | 72.0% |
| 1 lot NAS100 at 30,600 (1:20) | $1,530 | $12,330 | 82.2% |
The third trade breaks the rule even though it needs the least margin of the three. After the first two trades only $1,200 of room was left, which is enough for 0.78 lots of NAS100, not 1. A common way to cross the line isn't one big trade, but a normal trade on top of two others.
Balance or equity: the same trades, a different answer
Say those three trades are open and running a combined $900 loss. Your balance is still $15,000, but your equity is $14,100.
- Measured on balance: 12,330 ÷ 15,000 = 82.2%.
- Measured on equity: 12,330 ÷ 14,100 = 87.4%.
If your firm uses equity, your margin usage climbs while you're losing, which is exactly when you least want to be anywhere near the limit.
Reading margin usage from MT5
MT5 doesn't show margin usage directly. Open the Toolbox (Ctrl+T), Trade tab, and you'll see Balance, Equity, Margin and Margin level. Margin level is equity ÷ margin × 100, which is margin usage turned upside down:
Margin usage on equity = 10,000 ÷ Margin level
| MT5 margin level | Margin usage on equity |
|---|---|
| 500% | 20% |
| 250% | 40% |
| 167% | 60% |
| 125% | 80% |
| 100% | 100% |
So if your firm has an 80% rule measured on equity, the number to watch in MT5 is a margin level of 125%. Stay above it. On cTrader, the Trade Watch panel shows the same figures.
Why the number moves after you open the trade
Margin isn't fixed at the moment you enter. Platforms recalculate it as the price moves. If gold rises 1% from 4,200 to 4,242, the margin on a gold position rises 1% too, so a position that used 70% of your balance now uses 70.7%, measured on balance. If your firm measures on equity, the floating profit or loss from the same move matters far more than this small change in margin. And if your account isn't in US dollars, a move in the exchange rate changes the figure as well.
Two traps: index contract sizes and account currency
Index contract size. "1 lot" of NAS100 isn't the same thing everywhere. With a contract size of 1, one lot at 30,600 and 1:20 needs $1,530 of margin. At a broker where the contract size is 20, the same "1 lot" needs $30,600, twenty times more, and would take a $15,000 account far past any margin limit. Check the contract size in the symbol specification once and you'll never be surprised by it.
Account currency. If your account is in euros, rupees or pounds, the margin is converted into that currency before it's compared with your balance. On a euro account, 1 lot of EURUSD at 1:30 needs €3,333, which on a €15,000 account is 22.2%. For other symbols the exchange rate moves the figure every day, even when you don't touch the trade.
A habit that keeps you out of trouble
- Work out the usage before the new trade, with all your open trades included.
- Give yourself a lower ceiling than the firm's. If the rule is 80%, stop adding trades at 60% to 70%.
- If the firm measures equity, check again whenever a trade is in a big floating loss.
The 80% margin rule calculator does all of this for you: list your open trades, choose balance or equity, and it shows the usage after the new trade and the biggest lot size that still fits.