Margin Level
Margin Level is an important indicator in trading. It represents a ratio between Equity and Used Margin on a trading account.
Margin Level is calculated as Equity divided by Used Margin. In simple words, it is a proportion between the value on the account (Equity) and the trader’s funds deployed to open positions (Used Margin). The higher the Margin Level the more funds are available for a trader to make more trades.
Margin Level = Equity / Used Margin
Equity is the amount of Balance on a trading account adjusted by the floating (unrealised) profits or losses, often called FPL as an acronym.
Equity = Balance + FPL
Used Margin is how much of the trader’s funds out of the balance went into trading positions (essentially to collateralise them). The amount depends on the leverage used: the higher the leverage, the lower the amount of Margin is needed.