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Margin requirements

The Margin requirements – Prevent open module, will prevent opening new orders based on your available margin, to protect your account to some degree from margin calls. We advise all live traders to use this module with defensive settings.

Settings

  • Minimum free margin (%): the amount of free margin (in percentage) you require to remain after opening an order/ position. Normal value: 0 - 100. 0 = no limit. When entering 100, you will not get an open order, because your free margin would drop below 100%.

  • Maximum EA margin (%): the amount of margin (in percentage) this particular EA can use. This setting can also be useful when running multiple EAs on a single account and you want to make sure there’s always an amount of margin left for this EA to open an order. For example, you have 2 running EAs: ‘EA 1’ and ‘EA 2’. Both EAs use 10% of margin to open an order. You never want less than 60% of free margin. Also, you want ‘EA 1’ to always be able to open at least 1 order, because it’s your best EA. You can put Minimum free margin (%) to 60% on both EAs, then you can put this (Maximum EA margin (%)) setting to 40% for ‘EA 1’ and 30% for ‘EA 2’. Now, ‘EA 2’ can open 3 orders and there will still be 10% of margin left for ‘EA 1’ to open 1 order.
    Normal value: 0 - 100. 0 = no limit. When entering 0, you will not get an open order, because your EA can’t use enough margin to open an order. If your EA opens orders using 10% of margin, then this setting should be at least 10.

Margin Level

The percentages used in the settings above are not referring to the Margin Level percentage. Let’s say you want to at least stay above 400% of Margin Level. Here’s an example on how to use this module: you have an account of 10.021 USD, which means you now have 10.021 USD of free margin, which is 100% of ‘free margin’ and 0% of margin used. If I open an order of 0.05 BTC, I’ll use 743 USD of margin. That’s about 7.4% of margin used by this particular EA. So my ‘free margin’ is now 92.6%. If I had set the ‘Maximum EA margin’ to 7.4%, or the minimum free margin to 92.6%, the EA could now no longer open a second order, because the next order would use 7.4% as well. 14.8% (7.4% + 7.4%) would exceed the maximum of margin 7.4% and also the minimum of free margin of 92.6% would be violated. Had I put a maximum of 5% from the start, then the first 0.05 BTC order wouldn’t have opened either, because before opening an order the amount of required margin is calculated and evaluated.

Now about the Margin Level percentage. Let’s say you want a Margin Level minimum of 400%:

  • Minimum free margin (%) = 100 - 100 x (100 / Margin Level)
  • Minimum free margin (%) = 100 - 100 x (100 / 400)
  • Minimum free margin (%) = 75

So your ‘Minimum free margin (%)’ setting should be set to 75. Alternatively, you could set your EA to only use 25% of your margin, by setting the ‘Maximum EA margin (%)’ to 25.