Michael Scott T Moore

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What is free margin and margin level?

Free margin is the amount of equity available in a forex account to open new positions, calculated as Equity minus Used Margin. Margin level is a ratio that shows the relationship between Equity and Used Margin, expressed as a percentage. A higher margin level indicates more available equity and lower risk of a margin call. If the margin level drops too low (for example, below 100%), brokers may issue a margin call or automatically close positions to protect against negative balances. Monitoring free margin and margin level helps traders manage leverage and avoid forced liquidations.