PipWardenWhat is margin level in forex?
Definition Margin level is a trading account's equity divided by the margin in use, times 100: the percentage brokers watch to trigger margin calls and stop-outs.
Margin level is your equity divided by the margin in use, times 100. It tells you how much room the account has before the broker acts: at the margin call level you get a warning, and at the stop-out level the broker starts closing positions.
The formula
The MetaTrader 5 help defines it as:
Margin level = Equity ÷ Margin × 100
It falls when open trades lose, since equity falls, and when you open more positions, since margin rises. It is one number for the whole account, not one per trade.
| Margin level | What it means |
|---|---|
| Well above 100% | Equity covers the margin with room to spare |
| 100% | Equity equals margin; free margin is zero, so no new positions can be opened |
| The broker’s margin call level | A warning; the account enters the Margin Call state |
| The broker’s stop-out level | The broker closes one or more positions |
Both levels are set by the broker, in percent or, on some accounts, in money (MQL5 account properties). For retail CFD clients of EU brokers, the rules ESMA set in 2018, now applied by national regulators, set the close-out at 50% of the minimum required margin, per account.
A worked example
The margin calculator works out the level for your own position and how far price can move before the stop-out.
Where you see it in MT5
In the Trade tab (View → Toolbox → Trade), the account line shows Margin Level as a percentage, next to Balance, Equity, Margin and Free margin. The line turns red when the account is in the Margin Call or Stop Out state. An EA reads the broker’s levels as ACCOUNT_MARGIN_SO_CALL and ACCOUNT_MARGIN_SO_SO.
The common mistake
Reading a high margin level as low risk. A small position on a large account has a high margin level and can still lose its full planned amount at its stop. The margin level only measures the distance to the broker’s forced close. Why forex traders lose money shows how quickly high leverage shrinks that distance.
Margin level and PipWarden
By default, PipWarden skips a new trade if, after that trade’s margin, free margin would fall below 20% of equity. That is the same as keeping the margin level at or above 125% when the order goes in: free margin at 20% of equity means margin is 80% of equity, and 100 ÷ 80 × 100 = 125%. The skipped trade is logged as “Not enough free margin”.
The check runs before every order. It does not close anything if the margin level falls later: open trades run to their stops, and the broker’s own stop-out still applies. The features page lists the other pre-order checks.
Frequently asked questions
What is a good margin level?
What happens at 100% margin level?
Educational content, not financial advice. Forex and CFDs are traded on margin and are high risk: you can lose money, and more than your deposit with some brokers. Examples use made-up numbers and show no real results. Read the risk disclosure.