How to Calculate Free Margin in MT4
BY TIOmarkets
|June 10, 2026Free margin is the amount of your account that is available to open new positions or to absorb floating losses on existing positions. It is calculated as Equity minus Margin Used. While margin used is the portion of your account reserved as collateral for open positions, free margin is the portion that remains available for use.
This article covers what free margin means in MT4, the formula the platform uses to calculate it, worked examples through a trade lifecycle, where to view free margin in the platform, and what happens when free margin drops to zero or becomes negative.
What Is Free Margin in MT4?
Free margin is the available capacity in your account, expressed in your account currency. It tells you two things: how much equity remains to absorb floating losses on open positions before margin call or stop-out levels are reached, and how much margin is available to open new positions.
Free margin updates in real time. As prices move, floating P&L on open positions changes, which changes Equity, which changes Free Margin. As you open new positions, Margin Used increases, which decreases Free Margin. As you close positions, Margin Used decreases, freeing up margin.
Free margin is one of five key account metrics shown in the Trade tab footer of the Terminal window: Balance, Equity, Margin, Free Margin, and Margin Level.
The Free Margin Formula
The formula is:
Free Margin = Equity - Margin Used
Equity itself is derived as:
Equity = Balance + Floating P&L
Where Balance is your realised cash (settled transactions only) and Floating P&L is the unrealised profit or loss on all currently open positions.
Combining the two:
Free Margin = Balance + Floating P&L - Margin Used
This formula explains how Free Margin responds to each component. An increase in Balance (deposit, realised profit on a closed trade) increases Free Margin. A decrease in Balance (withdrawal, realised loss, commission charged at trade opening, swap debit) decreases Free Margin. A favourable price move on an open position increases Floating P&L and Free Margin. An unfavourable price move decreases Floating P&L and Free Margin. Opening a new position increases Margin Used and decreases Free Margin. Closing a position decreases Margin Used and frees up margin.
Worked Examples
Examples below assume a USD account starting at USD 10,000 with no open positions.
Initial State (No Positions)
Balance: USD 10,000 Floating P&L: USD 0 Used Margin: USD 0 Equity: USD 10,000 Free Margin: 10,000 - 0 = USD 10,000
All of your balance is available because nothing is locked up as margin.
Opening a Position
Open 1.0 lot long EURUSD at 1.0850.
Used margin on this position: 1.0 x 100,000 x 1.0850 x 1% = USD 1,085
At the moment of opening, floating P&L is approximately zero (ignoring spread cost).
Balance: USD 10,000 Floating P&L: USD 0 Used Margin: USD 1,085 Equity: USD 10,000 Free Margin: 10,000 - 1,085 = USD 8,915
You can still open additional positions using up to USD 8,915 of free margin.
Favourable Price Move (+50 Pips)
EURUSD moves from 1.0850 to 1.0900. The position is now up 50 pips.
Floating P&L: 1.0 lot x 50 pips x USD 10/pip = +USD 500
Balance: USD 10,000 (unchanged, position still open) Floating P&L: +USD 500 Used Margin: USD 1,085 Equity: USD 10,500 Free Margin: 10,500 - 1,085 = USD 9,415
Favourable price movement has increased free margin.
Unfavourable Price Move (-100 Pips from Entry)
EURUSD moves from 1.0850 to 1.0750. The position is now down 100 pips.
Floating P&L: 1.0 lot x -100 pips x USD 10/pip = -USD 1,000
Balance: USD 10,000 (unchanged) Floating P&L: -USD 1,000 Used Margin: USD 1,085 Equity: USD 9,000 Free Margin: 9,000 - 1,085 = USD 7,915
Unfavourable price movement has decreased free margin.
Opening an Additional Position
With the EURUSD position still down USD 1,000 and EURUSD at 1.0750, you open 0.5 lot long USDJPY at 150.00.
Additional margin: 0.5 x 100,000 x 1% = USD 500
Balance: USD 10,000 Floating P&L: -USD 1,000 Used Margin: 1,085 + 500 = USD 1,585 Equity: USD 9,000 Free Margin: 9,000 - 1,585 = USD 7,415
Free margin decreased by USD 500, matching the additional margin used on the new position.
Where to See Free Margin in MT4
Free margin is displayed in the Trade tab footer of the Terminal window.
Open the Terminal window with Ctrl+T. Click the Trade tab. At the bottom of the Trade tab, you will see a summary row containing: Balance, Equity, Margin, Free Margin, and Margin Level.
The "Free Margin" field is the free margin figure. It updates in real time.
If you have no open positions, Free Margin equals Balance (since Margin Used is zero and Floating P&L is zero).
Free Margin and Risk Management
Free margin gives you visibility into how much room you have before risk thresholds are triggered.
For opening new positions, free margin must be at least the required margin for the new trade. If free margin is less than the required margin, MT4 will reject the order with a "not enough money" or similar message.
For absorbing unfavourable price movement on existing positions, free margin acts as a buffer. As floating losses increase, equity decreases, and free margin decreases. When free margin reaches zero, equity equals margin used, and margin level is at 100%, which is the margin call threshold at TIOmarkets.
A useful risk-management practice is to monitor free margin relative to total margin used. A free margin much larger than used margin gives more room for adverse price movement and additional positions. A free margin close to zero (or negative) means the account is at or near the margin call threshold.
What Happens When Free Margin Drops to Zero
At free margin equal to zero, equity equals margin used. This is a 100% margin level, which is the margin call warning threshold at TIOmarkets.
Above 100% margin level, the account is functioning normally. New positions can be opened (subject to available free margin), and existing positions can be modified.
At 100% margin level (free margin equal to zero), new positions can no longer be opened. Existing positions remain open. Adverse price movement can continue to reduce equity below margin used, in which case free margin becomes negative and margin level falls below 100%.
If margin level falls to 30% (or 40% on Standard accounts using 1:2000 leverage under the unlimited leverage feature), stop-out is triggered. At stop-out, MT4 begins automatically closing positions, typically starting with the position showing the largest floating loss, until margin level is restored above the stop-out threshold.
These margin call (100%) and stop-out (30% or 40%) levels apply across TIOmarkets accounts. Levels are subject to change depending on market conditions and applicable regulatory requirements.
Practical Considerations
Free margin is one of the most important live metrics to watch. A free margin close to zero means little or no buffer against further adverse price movement.
For traders running multiple positions, monitor total free margin rather than individual position floating P&L. A single position's floating loss may look small, but combined with other positions, total free margin can erode quickly.
Spreads are variable and are typically higher than minimum figures shown. Leverage on each instrument is subject to change depending on market conditions and applicable regulatory requirements. Orders are executed at the best available market price, which may result in positive or negative slippage. Demo accounts often execute instantly and may not fully replicate live slippage conditions.
For calculating expected margin used and free margin before placing a trade, the Margin Calculator shows the exact margin required for a given position size and account currency. Use this to confirm that opening a new position will leave sufficient free margin for your risk management.
Trading at TIOmarkets
TIOmarkets offers MetaTrader 4 and MetaTrader 5 on desktop, web, and mobile, across four account types. The Standard account is created automatically on registration with a minimum deposit of $20 or currency equivalent. The Raw and VIP Black accounts are opened separately through the client area. The Nano account is MT5 only with a $20 minimum deposit, USD only. Hedging is supported on all accounts. A swap-free Islamic account is available; contact TIOmarkets for eligibility and instrument requirements. Copy trading is available on both MT4 and MT5.
Orders are executed at the best available market price, which may result in positive or negative slippage. Demo accounts often execute instantly and may not fully replicate live slippage conditions. Spreads are variable and are typically higher than minimum figures shown. Leverage on each instrument is subject to change depending on market conditions and applicable regulatory requirements. You can review the full list of account types on the TIOmarkets accounts page.
FAQ
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Behind every blog post lies the combined experience of the people working at TIOmarkets. We are a team of dedicated industry professionals and financial markets enthusiasts committed to providing you with trading education and financial markets commentary. Our goal is to help empower you with the knowledge you need to trade in the markets effectively.
