Direct answer
In forex, “margin” is the collateral you must post (or keep available) to open and maintain a leveraged trading position. It is not the same as the full trade value: only a portion is required as margin, and the rest is effectively provided through leverage. The specific label and calculation details—such as required margin, free margin, used margin, and any stop-out or call thresholds—can differ by broker and account type.
Explanation: the main margin concepts forex uses
Forex margin is usually described with a few related measures:
- Used margin: the part of your balance/equity that is tied up to support open positions.
- Free margin: the amount available for new positions after reserving used margin.
- Required margin: the amount the platform determines you must have to keep the position open under its margin rules.
- Equity: generally, your balance plus/minus floating profit and loss. Equity changes as the market moves.
When prices move, equity can decline. If equity approaches levels where the broker’s margin rules can no longer support the position, the platform may trigger a margin call (a request to add funds or reduce exposure) and/or stop-out (an automated reduction or closure of positions). The exact mechanics and thresholds are account- and broker-specific, so they are best confirmed in the platform’s margin policy documents.
Example or checks: what to verify on your platform
Because “what kind of margin” can mean different things, it helps to check your account’s own terminology:
- Look for definitions of required margin, used margin, and free margin (often shown in the trading account or help pages).
- Identify the leverage setting for your account and note how it affects margin requirements.
- Find the margin call and stop-out rules (for example, whether stop-out is based on equity percentage or another metric).
- Check instrument-specific settings if your platform shows different margin rules for different currency pairs or contract specifications.
This kind of verification is necessary because the same word—“margin”—can be used to refer to the requirement, the reserved portion, or the available cushion, depending on the context.
Limitations and what you can’t assume
- Broker/account variation: exact margin calculations, thresholds, and labels can vary. Without your broker’s published account specifications, you cannot reliably infer the precise margin behavior.
- Market impact uncertainty: margin outcomes depend on how price changes affect floating profit and loss and how your platform applies its rules.
- No universal “one number”: forex does not use a single universal margin formula across all providers and accounts.
If your goal is to understand “margin pressure,” consider reading the platform’s definitions for margin, used/free margin, equity, and stop-out so you can map your account’s terms to the risk thresholds that apply to you.