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Risk management

Free margin

By Jarosław Wasiński • Published: • Updated:
The part of account equity not currently required as margin. A common platform calculation is free margin = equity − used margin. Broker-specific adjustments can affect the amount available for new trades or withdrawals.
Example. With USD 2,000 equity and USD 600 used margin, free margin is USD 1,400. An additional USD 300 floating loss reduces it to USD 1,100 if used margin and other adjustments stay unchanged.

Read it alongside equity

Free margin changes with open profit or loss, charges and margin requirements. It is not a separate cash reserve protecting the account from losses. Pending orders may also reserve margin under the account’s rules.

Common mistake

USD 1,400 of free margin does not mean a new trade may safely lose USD 1,400. A cash risk budget and a margin requirement answer different questions. Withdrawal availability may also differ from the displayed value.

Apply it

Check free margin before and after a hypothetical new order, alongside margin level and planned stop risk. MetaTrader 5 documents these account fields; the broker’s settings remain decisive.

FAQ

Is free margin necessarily available for withdrawal?

No. Withdrawal rules, unsettled items and other adjustments can differ from the platform’s free-margin calculation.

Is free margin a sensible maximum loss budget?

No. Collateral capacity and chosen cash risk answer different questions; portfolio losses can exceed assumed stops.

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Put this term into practice

Use your broker’s contract specifications and current exchange rates. Calculators illustrate assumptions; they do not guarantee execution prices or returns.

Jarosław Wasiński

Editor-in-chief, ForexMechanics.com • Macro & FX analyst

Independent analyst and practitioner with over 20 years of experience in financial markets. Actively involved in Forex since 2007, with a focus on fundamental analysis, OTC market structure, and disciplined capital risk management.

  • Creator and editor-in-chief of MyBank.pl, providing reliable financial education since 2004.
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All content is educational and informational only – it does not constitute investment advice or a recommendation. Remember: leveraged trading (Forex/CFD) carries a high risk of rapid capital loss.