[{"data":1,"prerenderedAt":1166},["ShallowReactive",2],{"\u002Fglossary\u002Fwhat-is-margin-level":3,"\u002Fglossary\u002Fwhat-is-margin-level-related":327},{"id":4,"title":5,"body":6,"category":311,"date":312,"description":313,"draft":314,"extension":315,"meta":316,"navigation":314,"path":317,"related":318,"seo":323,"stem":324,"term":325,"updated":312,"__hash__":326},"glossary\u002F5.glossary\u002Fwhat-is-margin-level.md","What Is Margin Level? Formula and Stop Out Levels",{"type":7,"value":8,"toc":303},"minimark",[9,13,18,29,32,41,123,126,133,166,170,178,182,198,201,215,219,222,265,269,295],[10,11,12],"p",{},"Margin level is account equity divided by the margin locked up by open positions, expressed as a percentage. It is the number a broker watches to decide whether your positions are still adequately funded; below published thresholds the platform warns you, then closes positions for you.",[14,15,17],"h2",{"id":16},"how-it-works","How it works",[19,20,25],"pre",{"className":21,"code":23,"language":24},[22],"language-text","Equity       = Balance + floating P&L of open positions\nUsed margin  = Σ (position size × contract size × price) ÷ leverage\nMargin level = (Equity ÷ Used margin) × 100\nFree margin  = Equity − Used margin\n","text",[26,27,23],"code",{"__ignoreMap":28},"",[10,30,31],{},"500% means equity is five times the collateral in use; 100% means it exactly equals it. Below that the account is funding positions it can no longer cover.",[10,33,34,35,40],{},"Worked example: a $10,000 account opens 5 lots of EUR\u002FUSD at 1:100 ",[36,37,39],"a",{"href":38},"\u002Fglossary\u002Fwhat-is-leverage","leverage",". Used margin is about $5,400, margin level starts at 185%, and one pip on that size is $50.",[42,43,44,63],"table",{},[45,46,47],"thead",{},[48,49,50,54,57,60],"tr",{},[51,52,53],"th",{},"Adverse move",[51,55,56],{},"Equity",[51,58,59],{},"Margin level",[51,61,62],{},"Free margin",[64,65,66,81,95,109],"tbody",{},[48,67,68,72,75,78],{},[69,70,71],"td",{},"0 pips",[69,73,74],{},"$10,000",[69,76,77],{},"185%",[69,79,80],{},"$4,600",[48,82,83,86,89,92],{},[69,84,85],{},"−60 pips",[69,87,88],{},"$7,000",[69,90,91],{},"130%",[69,93,94],{},"$1,600",[48,96,97,100,103,106],{},[69,98,99],{},"−120 pips",[69,101,102],{},"$4,000",[69,104,105],{},"74%",[69,107,108],{},"−$1,400",[48,110,111,114,117,120],{},[69,112,113],{},"−146 pips",[69,115,116],{},"$2,700",[69,118,119],{},"50%",[69,121,122],{},"−$2,700",[10,124,125],{},"A 146-pip move, routine on EUR\u002FUSD in a news week, takes that account from apparently comfortable to liquidated at the broker's thresholds — typically 100% and 50%, but always set in the contract rather than by any universal standard.",[10,127,128,132],{},[129,130,131],"strong",{},"Why it collapses fastest when you are already losing."," With size held constant the ratio falls in a straight line, but four things break that assumption at exactly the wrong moment:",[134,135,136,143,149,155],"ul",{},[137,138,139,142],"li",{},[129,140,141],{},"The denominator does not shrink with you."," Used margin is frozen at the size you opened, so every dollar of floating loss comes off the numerator alone.",[137,144,145,148],{},[129,146,147],{},"Losing traders add size."," Averaging down, grid and martingale systems open more positions as price moves against them: equity falls while used margin rises, so the ratio drops non-linearly.",[137,150,151,154],{},[129,152,153],{},"Margin requirements rise in volatility."," Brokers cut leverage before major releases and weekends. Used margin increases on positions you never touched, with no price move at all.",[137,156,157,160,161,165],{},[129,158,159],{},"Spreads widen with the loss."," Equity is marked at the price that would close the position, so a ",[36,162,164],{"href":163},"\u002Fglossary\u002Fwhat-is-a-spread","spread"," blowout reprices the whole book at once.",[14,167,169],{"id":168},"why-it-matters","Why it matters",[10,171,172,173,177],{},"Margin level converts an unrealised loss into a forced, realised one at the worst point of the move — the mechanism behind a ",[36,174,176],{"href":175},"\u002Fglossary\u002Fwhat-is-a-margin-call","margin call",". It also reframes sizing: opening a position is choosing how much price movement the account can absorb before someone else takes over the exits, and that buffer, in pips, is knowable before you click.",[14,179,181],{"id":180},"what-the-data-shows","What the data shows",[10,183,184,185,189,190,193,194,197],{},"Across the public accounts on ShowMyTrades with trading history (August 2026), the ",[36,186,188],{"href":187},"\u002Fglossary\u002Fwhat-is-maximum-drawdown","median deepest drawdown"," is ",[129,191,192],{},"9.7%",", but ",[129,195,196],{},"17.6% have passed 50%",". These are accounts published here, not traders in general.",[10,199,200],{},"Hold that 50% against the ratio. Margin level scales with equity: an account at a comfortable-looking 200% is already at 100% — the usual call threshold — once equity has halved, and reaching a 50% stop out takes a fall of roughly three quarters. Falls past half are about one published account in six.",[10,202,203,204,207,208,214],{},"The gap between the two published drawdown figures tells the rest. ",[129,205,206],{},"Drawdown"," is measured on equity and includes floating losses; ",[129,209,210],{},[36,211,213],{"href":212},"\u002Fglossary\u002Fwhat-is-drawdown-on-balance","DD on Balance"," counts closed results only. A first figure far larger than the second means the account carried deep unrealised losses — another way of saying its margin level was low.",[14,216,218],{"id":217},"where-you-see-it-on-showmytrades","Where you see it on ShowMyTrades",[10,220,221],{},"Used margin is not published, so no account page carries a margin-level gauge. The numerator and the two variables behind the denominator are all visible.",[134,223,224,240,246,259],{},[137,225,226,229,230,232,233,235,236,239],{},[129,227,228],{},"Balance"," and ",[129,231,56],{},", the two rows immediately below ",[129,234,213],{}," in the ",[129,237,238],{},"Account Stats"," panel, where Equity carries its own percentage in brackets — equity as a share of balance. Well under 100% is an account holding floating losses right now, its margin level falling with them.",[137,241,242,243,245],{},"The ",[129,244,39],{}," badge in the account header, beside the broker and the account currency: it divides the notional value of every position, fixing the denominator before the first order.",[137,247,242,248,254,255,258],{},[129,249,250],{},[36,251,253],{"href":252},"\u002Fguides\u002Ftrading-volume-analysis","Volume"," column in the ",[129,256,257],{},"trades table",", in lots, which is the other half of used margin. Several tickets open at once on large volume means a large denominator against the same equity.",[137,260,261,264],{},[129,262,263],{},"Highest $",", the peak balance on the row directly under Equity, showing how far equity now sits below the account's own best.",[14,266,268],{"id":267},"common-misunderstandings","Common misunderstandings",[134,270,271,277,283,289],{},[137,272,273,276],{},[129,274,275],{},"\"Margin level is my leverage.\""," Related but not the same. Leverage is set per instrument and determines used margin; margin level is a live ratio that changes on every tick.",[137,278,279,282],{},[129,280,281],{},"\"1,000% is safe.\""," It is safe for that position set. Open four more of the same size and the same equity covers five times the collateral.",[137,284,285,288],{},[129,286,287],{},"\"Free margin is money I can withdraw.\""," It is unencumbered equity, including floating profit that has not been realised and can disappear.",[137,290,291,294],{},[129,292,293],{},"\"Closing one position fixes it.\""," Not proportionally. Closing the largest releases the most margin and lifts the ratio fastest; closing the smallest may not lift it above the threshold at all. Which one the platform picks at a stop out is not your choice.",[10,296,297,298,302],{},"For how equity, balance and drawdown read together, see ",[36,299,301],{"href":300},"\u002Fguides\u002Freading-a-trading-account-dashboard","how to read a trading account dashboard",".",{"title":28,"searchDepth":304,"depth":304,"links":305},2,[306,307,308,309,310],{"id":16,"depth":304,"text":17},{"id":168,"depth":304,"text":169},{"id":180,"depth":304,"text":181},{"id":217,"depth":304,"text":218},{"id":267,"depth":304,"text":268},"Risk","2026-08-19T00:00:00.000Z","Margin level is equity divided by used margin, as a percentage. The formula, the margin call and stop out thresholds, and why it falls fastest when you lose.",true,"md",{},"\u002Fglossary\u002Fwhat-is-margin-level",[319,320,321,322],"what-is-a-margin-call","what-is-leverage","what-is-position-sizing","what-is-a-daily-drawdown-limit",{"title":5,"description":313},"5.glossary\u002Fwhat-is-margin-level","Margin Level","Q9Dx6hpaBEKrz852D0ibuqsOObwtB7xfIPla6pe6iSc",[328,539,750,959],{"id":329,"title":330,"body":331,"category":311,"date":312,"description":527,"draft":314,"extension":315,"meta":528,"navigation":314,"path":529,"related":530,"seo":535,"stem":536,"term":537,"updated":312,"__hash__":538},"glossary\u002F5.glossary\u002Fwhat-is-a-daily-drawdown-limit.md","What Is a Daily Drawdown Limit? Rules and Reset Times",{"type":7,"value":332,"toc":520},[333,346,348,354,357,363,369,375,378,385,387,390,397,399,412,415,428,443,445,448,479,482,484,513],[10,334,335,336,340,341,345],{},"A daily drawdown limit caps how much an account may lose within a single trading day, measured from a reference set at the start of that day. It is the standard risk control in ",[36,337,339],{"href":338},"\u002Fglossary\u002Fwhat-is-a-prop-firm","proprietary trading firm"," agreements, enforced automatically: breach it by a cent and the account is failed regardless of the overall result. Unlike ordinary ",[36,342,344],{"href":343},"\u002Fglossary\u002Fwhat-is-drawdown","drawdown",", it resets daily and is judged intraday.",[14,347,17],{"id":16},[19,349,352],{"className":350,"code":351,"language":24},[22],"Reference    = balance or equity captured at the daily reset\nDaily loss   = Reference − Current equity\nBreach when    Daily loss ≥ Limit % × Reference\n",[26,353,351],{"__ignoreMap":28},[10,355,356],{},"Three parameters decide what the rule actually means, and they differ between firms.",[10,358,359,362],{},[129,360,361],{},"Balance-based or equity-based."," A balance-based limit counts closed trades only. An equity-based limit counts floating losses too, so an unrealised loss can breach the rule before it is realised — or before it recovers. Most agreements are equity-based, so the check runs on every tick.",[10,364,365,368],{},[129,366,367],{},"Which reference."," Some firms take the balance at the reset, some the equity, some the higher of the two. That third variant is strictest: unrealised profit raises the reference, so an account opening the day on a floating winner gets no extra room, only a higher bar to fall from.",[10,370,371,374],{},[129,372,373],{},"When the day starts."," The reset happens at a fixed time on the firm's server, typically 00:00 platform time or 17:00 New York — not your local midnight. A position held across it changes which day's budget it consumes, and a loss taken at 23:55 platform time comes from a budget that refills five minutes later.",[10,376,377],{},"A worked case: a $100,000 account, 5% equity-based limit, balance reference. The floor is $95,000 equity. Closed losses of $3,000 plus a floating loss of $2,100 puts equity at $94,900 — breached, even though only $3,000 was realised, and even if that open position closes at break-even an hour later.",[10,379,380,381,384],{},"It runs in parallel with ",[36,382,383],{"href":187},"the overall limit",", measured against the initial balance or a trailing high-water mark, which never resets. The daily one is tighter and breached far more often.",[14,386,169],{"id":168},[10,388,389],{},"The daily limit changes what a strategy is allowed to be, not just how large it may trade. Any system that recovers within the same day — averaging down, grid, holding through an adverse move — is incompatible with an equity-based daily rule, however well it performs over a month.",[10,391,392,393,396],{},"It also blocks the worst reflex in trading: doubling size to recover a loss on the day it happened. Whether a firm imposes the rule or a trader adopts it, that is most of its value — a second floor alongside ",[36,394,395],{"href":317},"margin level",", and on a leveraged account usually the one reached first.",[14,398,181],{"id":180},[10,400,184,401,408,409,197],{},[129,402,403,407],{},[36,404,406],{"href":405},"\u002Fglossary\u002Fwhat-is-average-trade-length","median trade length"," is 2.4 hours"," and the median account has ",[129,410,411],{},"171 closed trades",[10,413,414],{},"A 2.4-hour median means the typical position opens and closes inside one session. For accounts trading that way the daily limit, not the overall one, is the binding constraint: nearly all the risk is expressed and resolved inside a single reset window.",[10,416,417,418,420,421,229,424,427],{},"The depth figures set the scale: median deepest drawdown ",[129,419,192],{},", with ",[129,422,423],{},"38.5% under 5%",[129,425,426],{},"38.2% past 20%",". A 5% daily rule is calibrated to be uncomfortable, not generous.",[10,429,430,431,229,434,437,438,442],{},"Automation matters too: median autotrading share is ",[129,432,433],{},"99%",[129,435,436],{},"53.9% of accounts run above 90% automated",". An ",[36,439,441],{"href":440},"\u002Fglossary\u002Fwhat-is-an-expert-advisor","Expert Advisor"," has no concept of the firm's reset time unless it was coded with one, which is why the reference-and-reset detail is not trivia.",[14,444,218],{"id":217},[10,446,447],{},"ShowMyTrades does not set or enforce prop firm rules. It provides the day-level record needed to check whether one was respected.",[134,449,450,460,469,474],{},[137,451,242,452,455,456,459],{},[129,453,454],{},"Monthly Returns"," module has a ",[129,457,458],{},"Calendar"," view alongside Table, Chart and Summary. It shows every day's result with week summaries beside it, so a single bad day stays visible instead of averaging into its month.",[137,461,462,465,466,468],{},[129,463,464],{},"Avg Daily %",", the third row of the ",[129,467,238],{}," panel, under Gain and Abs. Gain, gives the typical day an outlier is judged against.",[137,470,242,471,473],{},[129,472,206],{}," view in the charts viewer plots daily drawdown as bars over the account's life; days that approached a limit read as spikes.",[137,475,242,476,478],{},[129,477,257],{},", with Duration, Profit (Gross), Swap and Commission per trade, is how a single day's loss is reconstructed.",[10,480,481],{},"Note the measurement gap: the calendar is built from closed results, while an equity-based rule watches floating equity tick by tick. A day that reads as a small loss here may still have breached one intraday.",[14,483,268],{"id":267},[134,485,486,492,498,504],{},[137,487,488,491],{},[129,489,490],{},"\"I closed only 4% down, so a 5% rule held.\""," Under an equity-based limit, floating losses count the moment they exist. What you closed is not what was measured.",[137,493,494,497],{},[129,495,496],{},"\"The day resets at midnight.\""," It resets at the firm's server time. Traders in other time zones routinely book a loss on what they believe is the next day.",[137,499,500,503],{},[129,501,502],{},"\"The overall limit is the real risk.\""," The daily one is smaller and tested every session. It ends most accounts.",[137,505,506,509,510,512],{},[129,507,508],{},"\"Hedging pauses the loss.\""," Both legs still float, both carry ",[36,511,164],{"href":163}," and swap, and combined equity is what the rule reads.",[10,514,515,516,302],{},"For how to read a single day in context of the month around it, see ",[36,517,519],{"href":518},"\u002Fguides\u002Fmonthly-returns-table-explained","the monthly returns table explained",{"title":28,"searchDepth":304,"depth":304,"links":521},[522,523,524,525,526],{"id":16,"depth":304,"text":17},{"id":168,"depth":304,"text":169},{"id":180,"depth":304,"text":181},{"id":217,"depth":304,"text":218},{"id":267,"depth":304,"text":268},"A daily drawdown limit caps how much an account may lose in one trading day, measured from a daily reference. Balance versus equity, reset times, and real data.",{},"\u002Fglossary\u002Fwhat-is-a-daily-drawdown-limit",[531,532,533,534],"what-is-drawdown","what-is-maximum-drawdown","what-is-margin-level","what-is-risk-of-ruin",{"title":330,"description":527},"5.glossary\u002Fwhat-is-a-daily-drawdown-limit","Daily Drawdown Limit","pnA2cFIVCRvmJ1MVWvwNkuYA7LHY-cxSCLWEoBgyzz8",{"id":540,"title":541,"body":542,"category":311,"date":312,"description":743,"draft":314,"extension":315,"meta":744,"navigation":314,"path":175,"related":745,"seo":746,"stem":747,"term":748,"updated":312,"__hash__":749},"glossary\u002F5.glossary\u002Fwhat-is-a-margin-call.md","What Is a Margin Call? Formula, Stop Out and Real Data",{"type":7,"value":543,"toc":736},[544,551,553,559,562,565,603,606,621,632,634,637,640,648,650,657,660,663,665,668,698,700,731],[10,545,546,547,550],{},"A margin call is the broker's warning that the equity in your account has fallen too close to the margin locked up by your open positions. It is a threshold on a ratio, not a judgement call: when ",[36,548,549],{"href":317},"equity divided by used margin"," drops below a published level, the warning fires. Ignore it and the stop out follows, closing positions for you.",[14,552,17],{"id":16},[19,554,557],{"className":555,"code":556,"language":24},[22],"Equity       = Balance + floating P&L of open positions\nFree margin  = Equity − Used margin\nMargin level = (Equity ÷ Used margin) × 100\n",[26,558,556],{"__ignoreMap":28},[10,560,561],{},"Take a $10,000 balance with two positions using $2,000 of margin and a floating loss of $1,500. Equity is $8,500, so margin level is 425%. Let that loss widen to $8,100 and equity is $1,900: margin level 95%, under a typical 100% call threshold.",[10,563,564],{},"Thresholds vary by broker and are always in the contract. The common pair:",[42,566,567,580],{},[45,568,569],{},[48,570,571,574,577],{},[51,572,573],{},"Level",[51,575,576],{},"Typical threshold",[51,578,579],{},"What happens",[64,581,582,593],{},[48,583,584,587,590],{},[69,585,586],{},"Margin call",[69,588,589],{},"100%",[69,591,592],{},"Warning issued, no new positions accepted",[48,594,595,598,600],{},[69,596,597],{},"Stop out",[69,599,119],{},[69,601,602],{},"The platform closes positions automatically",[10,604,605],{},"The sequence is fixed:",[607,608,609,612,615,618],"ol",{},[137,610,611],{},"Floating losses erode equity while used margin stays where it is.",[137,613,614],{},"Margin level crosses the call threshold. Warning. New orders refused.",[137,616,617],{},"Losses continue. Margin level reaches the stop-out level.",[137,619,620],{},"The platform liquidates positions until the ratio is back above the threshold. Most brokers close the largest loser first.",[10,622,623,624,628,629,631],{},"Nothing in that list waits for you to be at your desk: a liquidation at 3am on a thin market prints exactly as if you had chosen it. The ",[36,625,627],{"href":626},"\u002Ftools\u002Fmargin-calculator","margin calculator"," shows how much margin a given size and ",[36,630,39],{"href":38}," will actually freeze before you open anything.",[14,633,169],{"id":168},[10,635,636],{},"The timing is the problem, and it is structural. A margin call arrives at the maximum of the adverse move — that is what the maximum means. Positions are closed at the worst prices of the episode, and the trade that would have recovered is closed before it does. That is the difference between a drawdown you sit through and one realised on your behalf.",[10,638,639],{},"The order makes it worse: closing the largest loser first means the forced exit is the position furthest from its entry.",[10,641,642,643,647],{},"It can also arrive without the price doing anything unusual. ",[36,644,646],{"href":645},"\u002Fglossary\u002Fwhat-is-a-swap-in-forex","Swap"," charged overnight reduces equity, which reduces margin level, on positions you have not touched. A carry-negative basket held for months can walk itself into a call in slow motion.",[14,649,181],{"id":180},[10,651,652,653,656],{},"Across the public accounts on ShowMyTrades with trading history (August 2026), 17.6% have reached a ",[36,654,655],{"href":187},"deepest drawdown"," of more than 50%. These are accounts published here, not traders in general.",[10,658,659],{},"That figure matters because of where the stop out sits. An account holding positions that use most of its equity as margin is already trading near a 100% margin level; halve the equity and the ratio is at a 50% stop out, whatever the owner intended. A drawdown past 50% does not prove a margin call happened — some of those positions were closed by hand — but it marks the population that got close enough for the broker to have a say.",[10,661,662],{},"Recovery is the other half of the arithmetic. Getting back to flat from −50% requires +100%, against a median time-weighted return of +3.2% across the same accounts.",[14,664,218],{"id":217},[10,666,667],{},"There is no live margin-level gauge on a public account page, but every input that drives one is visible.",[134,669,670,677,683,693],{},[137,671,672,229,674,676],{},[129,673,228],{},[129,675,56],{}," in the account stats panel. The gap between them is the floating P&L that pushes margin level down. A wide negative gap is an account whose margin level is falling right now.",[137,678,242,679,682],{},[129,680,681],{},"Equity Curve"," in the charts viewer plots both lines together. A near-vertical drop in equity that the balance line then catches up to is a loss being realised — voluntarily or not.",[137,684,685,687,688,692],{},[129,686,206],{}," versus ",[36,689,690],{"href":212},[129,691,213],{}," in the stats panel. The first includes open positions, the second does not. A large equity drawdown that later appears in the balance figure is the moment the floating loss was closed.",[137,694,242,695,697],{},[129,696,257],{},", with its Duration and Profit (Gross) columns. A cluster of positions all closing inside the same minute, all at a loss, is the fingerprint of a stop out.",[14,699,268],{"id":267},[134,701,702,708,714,725],{},[137,703,704,707],{},[129,705,706],{},"\"Margin call and stop out are the same thing.\""," They are two thresholds. The call is a warning; the stop out is execution. Some brokers set them close enough together that the gap is not usable.",[137,709,710,713],{},[129,711,712],{},"\"I will just deposit more when it happens.\""," Notification is not a right, and the interval between call and stop out can be seconds in a fast market. Bank transfers clear on banking time, not market time.",[137,715,716,719,720,724],{},[129,717,718],{},"\"A stop loss protects me from a margin call.\""," Only if it fills. Across a weekend gap the market can reopen far past your ",[36,721,723],{"href":722},"\u002Fglossary\u002Fwhat-is-a-stop-loss","stop loss",", and margin level can be below stop out before the first tick prints.",[137,726,727,730],{},[129,728,729],{},"\"Negative balance protection means I cannot lose more than my deposit.\""," Where it is offered and enforced, it caps the debt, not the loss. You still lose the account.",[10,732,733,734,302],{},"For how equity, balance and drawdown fit together on a live page, read ",[36,735,301],{"href":300},{"title":28,"searchDepth":304,"depth":304,"links":737},[738,739,740,741,742],{"id":16,"depth":304,"text":17},{"id":168,"depth":304,"text":169},{"id":180,"depth":304,"text":181},{"id":217,"depth":304,"text":218},{"id":267,"depth":304,"text":268},"A margin call is the broker's warning that your equity no longer covers your open positions. The margin level formula, the stop-out sequence, and real data.",{},[320,532,321],{"title":541,"description":743},"5.glossary\u002Fwhat-is-a-margin-call","Margin Call","VynxA6FNkPfgy4BtWsmmyu4HuFH7a_Ov3jgPAgDjJ70",{"id":751,"title":752,"body":753,"category":311,"date":312,"description":951,"draft":952,"extension":315,"meta":953,"navigation":314,"path":38,"related":954,"seo":955,"stem":956,"term":957,"updated":312,"__hash__":958},"glossary\u002F5.glossary\u002Fwhat-is-leverage.md","What Is Leverage in Forex? Formula and Real Numbers",{"type":7,"value":754,"toc":944},[755,758,760,763,769,772,820,823,826,836,838,841,844,860,862,865,871,874,876,879,908,910,936],[10,756,757],{},"Leverage is the ratio between the size of a position and the capital required to hold it. A broker offering 1:100 lets you control $100,000 of currency with $1,000 of your own money set aside as margin. It is a borrowing facility, not a strategy: it changes how much capital a trade ties up, and nothing else about the trade.",[14,759,17],{"id":16},[10,761,762],{},"Margin is the deposit the broker freezes while a position is open. The arithmetic is short.",[19,764,767],{"className":765,"code":766,"language":24},[22],"Position value  = Contract size × Lots × Price\nRequired margin = Position value ÷ Leverage\n\nEffective leverage = Total open position value ÷ Account equity\n",[26,768,766],{"__ignoreMap":28},[10,770,771],{},"One standard lot of EUR\u002FUSD is 100,000 units. At 1.0850 the position is worth $108,500.",[42,773,774,787],{},[45,775,776],{},[48,777,778,781,784],{},[51,779,780],{},"Account leverage",[51,782,783],{},"Margin frozen",[51,785,786],{},"Cost of a 50-pip adverse move",[64,788,789,800,810],{},[48,790,791,794,797],{},[69,792,793],{},"1:30",[69,795,796],{},"$3,616.67",[69,798,799],{},"$500",[48,801,802,805,808],{},[69,803,804],{},"1:100",[69,806,807],{},"$1,085.00",[69,809,799],{},[48,811,812,815,818],{},[69,813,814],{},"1:500",[69,816,817],{},"$217.00",[69,819,799],{},[10,821,822],{},"The position is identical in all three rows. Leverage moved the margin, never the risk.",[10,824,825],{},"The number that actually describes exposure is effective leverage: the notional value of everything open divided by equity. A trader on a 1:500 account running 0.05 lots on $10,000 sits at 0.54:1 — less exposed than someone who paid cash for the same currency. A trader on a 1:30 account running 2.5 lots on the same $10,000 sits at 27:1, pressed against the ceiling the regulator set. The tier says nothing about either of them; the position size says everything.",[10,827,828,829,833,834,302],{},"Run it on your own instrument with the ",[36,830,832],{"href":831},"\u002Ftools\u002Fleverage-calculator","leverage calculator"," and the ",[36,835,627],{"href":626},[14,837,169],{"id":168},[10,839,840],{},"High leverage does not lose money. It removes the constraint that used to stop you.",[10,842,843],{},"On a 1:30 account, $10,000 of equity caps you at about 2.7 standard lots of EUR\u002FUSD before margin runs out — the broker enforces a position-size ceiling on your behalf. On 1:500 the same $10,000 supports 46 lots. Nothing improved; a ceiling was removed.",[10,845,846,847,851,852,856,857,859],{},"The chain that empties accounts is always the same. Leverage permits a large position, the large position produces a loss too big to sit through, and the resulting drawdown demands a return arithmetic will not supply — ",[36,848,850],{"href":849},"\u002Fguides\u002Fmaximum-drawdown-explained","a 50% loss needs a 100% gain to get back to flat",". Leverage is where the chain starts, but the link that does the damage is size, which is why ",[36,853,855],{"href":854},"\u002Fglossary\u002Fwhat-is-position-sizing","position sizing"," is the control worth having and the ",[36,858,176],{"href":175}," is the symptom rather than the cause.",[14,861,181],{"id":180},[10,863,864],{},"The 10,000+ accounts connected to ShowMyTrades (August 2026) sit across 703 distinct broker servers, on MT4, MT5, cTrader and TradeLocker. Effectively every leverage tier on the market is represented somewhere in that set, from a regulated 1:30 cap to offshore 1:500 and beyond.",[10,866,867,868,870],{},"The outcomes do not sort by tier. Across the public accounts with trading history, the median ",[36,869,655],{"href":187}," is 9.7% — but 38.5% of them never went more than 5% underwater, while 38.2% gave back more than a fifth of their peak and 17.6% more than half of it.",[10,872,873],{},"Two groups of almost identical size, drawn from the same pool of leverage settings, ending an order of magnitude apart. What separates them is not what the broker permitted. These figures describe accounts published on ShowMyTrades, not traders in general, and within that population the variable that moved was size.",[14,875,218],{"id":217},[10,877,878],{},"The leverage the broker granted appears as a badge in the account page header, next to the broker name and the account currency. It is read from the terminal, not typed in by the owner.",[10,880,881,882,885,886,889,890,229,892,896,897,902,903,229,905,907],{},"What the trader did with it shows up elsewhere. ",[129,883,884],{},"Total Lots"," in the advanced statistics is the ",[36,887,888],{"href":252},"cumulative volume actually traded",". ",[129,891,206],{},[129,893,894],{},[36,895,213],{"href":212}," in the account stats panel show what that volume cost at the worst moment — the first on equity including open positions, the second on closed balance only. The ",[129,898,899],{},[36,900,681],{"href":901},"\u002Fglossary\u002Fwhat-is-an-equity-curve"," in the charts viewer plots ",[129,904,228],{},[129,906,56],{}," together, and the gap between the two lines is where an oversized open position hides until it is closed.",[14,909,268],{"id":267},[134,911,912,918,924,930],{},[137,913,914,917],{},[129,915,916],{},"\"1:500 is riskier than 1:30.\""," The account setting is not risk. Two accounts holding identical positions carry identical risk whatever the broker permits. Higher leverage only widens the range of sizes you are allowed to choose badly from.",[137,919,920,923],{},[129,921,922],{},"\"More leverage means more profit.\""," It means less capital tied up as margin. Profit and loss are set by position size and price movement, both unchanged by the tier.",[137,925,926,929],{},[129,927,928],{},"\"Free margin is spare buying power.\""," Free margin is the distance between you and a stop out. Spending it is how a manageable loss becomes a liquidation.",[137,931,932,935],{},[129,933,934],{},"\"My broker caps me at 1:30, so I am safe.\""," A regulatory cap limits maximum total size, not the risk on any single trade. An account can still be lost on one badly sized position well inside a 1:30 limit.",[10,937,938,939,943],{},"Every number above has a calculator behind it — see ",[36,940,942],{"href":941},"\u002Fguides\u002Fforex-calculators-guide","the guide to forex calculators"," for how they fit together.",{"title":28,"searchDepth":304,"depth":304,"links":945},[946,947,948,949,950],{"id":16,"depth":304,"text":17},{"id":168,"depth":304,"text":169},{"id":180,"depth":304,"text":181},{"id":217,"depth":304,"text":218},{"id":267,"depth":304,"text":268},"Leverage is the ratio between position size and the capital backing it. Here is the margin formula, a worked example, and drawdown data from thousands of accounts.",false,{},[319,321,532],{"title":752,"description":951},"5.glossary\u002Fwhat-is-leverage","Leverage","9fzrPGzcUcu5W9wxB-HAiIpCi3gDQHwpcPzkOAH6NtA",{"id":960,"title":961,"body":962,"category":311,"date":312,"description":1158,"draft":952,"extension":315,"meta":1159,"navigation":314,"path":854,"related":1160,"seo":1162,"stem":1163,"term":1164,"updated":312,"__hash__":1165},"glossary\u002F5.glossary\u002Fwhat-is-position-sizing.md","What Is Position Sizing? Formula and Lot Size Calculation",{"type":7,"value":963,"toc":1151},[964,970,972,975,981,984,990,997,1000,1020,1027,1033,1035,1038,1044,1046,1061,1064,1078,1080,1087,1112,1114,1145],[10,965,966,967,969],{},"Position sizing is the decision of how large a trade to open, derived from how much of the account you are willing to lose if the trade fails. It converts a risk percentage into a lot size using two inputs: the distance to your stop and the value of one pip at that size. It is the single variable that determines an account's ",[36,968,344],{"href":343}," profile, and it is chosen before the trade rather than discovered after it.",[14,971,17],{"id":16},[10,973,974],{},"Three steps, in order.",[19,976,979],{"className":977,"code":978,"language":24},[22],"1. Risk amount   = Account balance × Risk %\n2. Pip value     = Contract size × Pip in quote currency × FX rate to account currency\n3. Position size = Risk amount \u002F (Stop distance in pips × Pip value per lot)\n",[26,980,978],{"__ignoreMap":28},[10,982,983],{},"A worked example on a $10,000 account risking 1% per trade, with a 50-pip stop on EUR\u002FUSD, where one standard lot moves $10 per pip:",[19,985,988],{"className":986,"code":987,"language":24},[22],"Risk amount   = 10,000 × 0.01      = $100\nPosition size = 100 \u002F (50 × 10)    = 0.20 lots\n",[26,989,987],{"__ignoreMap":28},[10,991,992,993,996],{},"Widen the stop to 100 pips and the same $100 of risk buys 0.10 lots. The risk stays constant; the size adapts. That inversion is the whole idea, and it is why sizing and ",[36,994,995],{"href":722},"stop-loss"," placement cannot be decided separately.",[10,998,999],{},"Three methods dominate in practice:",[134,1001,1002,1008,1014],{},[137,1003,1004,1007],{},[129,1005,1006],{},"Fixed lot."," Always 0.10 lots, whatever the stop or the balance. Simple, and the risk per trade drifts constantly as both change.",[137,1009,1010,1013],{},[129,1011,1012],{},"Percentage risk (fixed fractional)."," The formula above. Risk stays proportional, so losses shrink in currency terms as the account falls — the mechanism that makes recovery arithmetically possible.",[137,1015,1016,1019],{},[129,1017,1018],{},"Martingale progression."," Size increases after a loss to recover it. Wins are frequent and small, the equity curve looks immaculate, and the distribution of outcomes has a fat left tail that arrives all at once.",[10,1021,1022],{},[1023,1024],"img",{"alt":1025,"src":1026},"Doubling the lot size after every loss against a fixed fraction of equity: same win rate, same market, opposite outcomes","\u002Fimages\u002Farticles\u002Flot-progression.svg",[10,1028,1029],{},[1030,1031,1032],"em",{},"Which one an account uses is readable from the lot sizes alone.",[14,1034,169],{"id":168},[10,1036,1037],{},"Entries decide whether you win. Sizing decides whether you are still there for the next one. Two traders taking identical signals with identical stops produce identical win rates and completely different accounts, because one risked 0.5% and the other risked 8%.",[10,1039,1040,1041,1043],{},"Sizing is also where ",[36,1042,39],{"href":38}," does its actual damage. High leverage is not itself risk — it is permission to take risk. The risk arrives when that permission is used to open a size whose stop distance implies a loss the account cannot absorb twice in a row.",[14,1045,181],{"id":180},[10,1047,1048,1049,1052,1053,1056,1057,1060],{},"Sizing leaves its signature in the drawdown tail. Across the accounts published on ShowMyTrades that have trading history (August 2026) — accounts published here, not traders in general — ",[129,1050,1051],{},"38.2%"," have been ",[36,1054,1055],{"href":187},"more than 20% underwater"," at some point and ",[129,1058,1059],{},"17.6%"," have lost more than half their peak value.",[10,1062,1063],{},"A properly sized fixed-fractional account rarely reaches that last band. Losing 50% at 1% risk per trade requires roughly 69 consecutive losses. Accounts in that tail generally arrived another way: escalating size after losses, or a size chosen without reference to the stop at all.",[10,1065,1066,1067,1069,1070,1073,1074,1077],{},"Context for who is doing the sizing: the median autotrading share on these accounts is ",[129,1068,433],{},", and ",[129,1071,1072],{},"53.9%"," run above 90% automated, against ",[129,1075,1076],{},"42.2%"," under 10%. On more than half of the published set, position size is a line in an EA's settings — configured once and never revisited as the balance moves.",[14,1079,218],{"id":217},[10,1081,242,1082,1086],{},[36,1083,1085],{"href":1084},"\u002Ftools\u002Fposition-size-calculator","position size calculator"," runs the formula above with live prices, in your account currency, for percentage or fixed-amount risk and for stops expressed in price or pips.",[10,1088,1089,1090,1092,1093,1095,1096,1099,1100,1103,1104,235,1108,1111],{},"On a published account page you can audit sizing rather than assume it. The ",[129,1091,257],{}," carries a ",[129,1094,253],{}," column showing the lot size of every individual trade, so a size that steps up after each loser is visible directly. ",[129,1097,1098],{},"Custom Analysis"," adds a ",[129,1101,1102],{},"Lot Size"," min\u002Fmax filter: set a floor above the account's normal size and see whether the surviving trades cluster immediately after losses, which is the martingale signature. ",[129,1105,1106],{},[36,1107,884],{"href":252},[129,1109,1110],{},"Advanced Statistics"," module gives the aggregate; across published accounts it stands at 1,724,575 lots traded.",[14,1113,268],{"id":267},[134,1115,1116,1122,1133,1139],{},[137,1117,1118,1121],{},[129,1119,1120],{},"\"Risking 2% means using 2% of my account.\""," No. 2% is the loss if the stop is hit. The margin the position occupies is a separate figure entirely, set by leverage.",[137,1123,1124,1127,1128,1132],{},[129,1125,1126],{},"\"I risk 1% per trade, so my worst case is 1%.\""," Only with one position open. ",[36,1129,1131],{"href":1130},"\u002Fglossary\u002Fwhat-is-correlation-risk","Five correlated positions"," at 1% each are one 5% trade wearing a disguise, and correlated pairs move together precisely when it hurts.",[137,1134,1135,1138],{},[129,1136,1137],{},"\"No stop loss, so no risk to calculate.\""," Without a stop, the position size formula has no denominator — the risk is not small, it is undefined, and its true value is the margin call.",[137,1140,1141,1144],{},[129,1142,1143],{},"\"Compounding means scaling up.\""," Fixed-fractional sizing scales both ways. Increasing lots after wins while holding them constant after losses is not compounding; it is a slow ratchet toward a drawdown you never sized for.",[10,1146,1147,1148,302],{},"For the full set of risk and sizing tools and when each one applies, see ",[36,1149,1150],{"href":941},"the forex calculators guide",{"title":28,"searchDepth":304,"depth":304,"links":1152},[1153,1154,1155,1156,1157],{"id":16,"depth":304,"text":17},{"id":168,"depth":304,"text":169},{"id":180,"depth":304,"text":181},{"id":217,"depth":304,"text":218},{"id":267,"depth":304,"text":268},"Position sizing turns a risk percentage into a lot size using your stop distance and pip value. The formula, the three common methods, and what bad sizing costs.",{},[531,532,1161,320],"what-is-a-stop-loss",{"title":961,"description":1158},"5.glossary\u002Fwhat-is-position-sizing","Position Sizing","qP5mfGAxSuWSiccKuy0i_N8LQtpN2UHwOG-ZOVxOViU",1787415693106]