Introducing Dynamic Margin and Leverage in Trading with LogixTrader

When it comes to trading, effectively managing your capital is crucial. That's why traders often seek to leverage their funds, enabling them to control larger positions with a smaller investment. One of the keyways to optimise your capital usage while trading is by understanding how dynamic margin works. This feature, available on our brand-new LogixTrader platform, is designed to help traders balance flexibility and risk, particularly when dealing with varying trade sizes. 

In this post, we'll dive deep into how dynamic margin is calculated, its benefits for traders, and why it's a significant feature that sets LogixTrader apart from the competition. Please note that the dynamic margin feature in LogixTrader is not available to clients to Australian based clients. 

What Is Dynamic Margin? 

Dynamic Margin refers to a margin system that adapts to your trading volume, offering higher leverage for smaller trade sizes and adjusting the margin requirements as trade volumes increase. This feature allows traders to utilise leverage more effectively while providing flexibility depending on the size of their positions. 

In LogixTrader, the margin required for each trade is not static. Instead, it is determined by specific Margin Tiers based on the notional value of your trade. These tiers define the margin percentage required and the leverage you can use for each trade size bracket.  

Understanding Leverage and Its Impact on Margin 

Leverage in trading determines how much capital you can control with your margin deposit. Essentially, leverage is the ratio of the trade size to the margin you need to open the position. For example, with a leverage of 1:5000, you can control a trade size of €5,000 with only €1 of margin. This high leverage enables traders to take larger positions with less capital. However, as the size of your trades increases, the available leverage decreases, and the margin required rises proportionally. For instance, a trade size of €51,000 offers leverage of 1:500, requiring €61 + 0.20% of the amount above €50,000 of margin.  

How Dynamic Margin Is Calculated 

The table below breaks down the required margin based on the notional value of the trade in EURUSD. In this example, the account base currency is Euros. Each tier shows the margin rate and leverage for a specific trade size, along with how much margin is needed to execute the trade. 

This table showcases how the margin requirement changes depending on the size of your trade. Smaller positions will require less margin, while larger trades will progressively require more margin. 

Example: How to Calculate Dynamic Margin 

Let’s say you’re trading EURUSD with a position size of €25,000. This amount falls into Tier (Trade Size: €20,000 - €50,000) as shown in the above table. The calculation for your margin requirement would be as follows: 

1. For the first €20,000 (which falls under Tier 3), the margin is fixed at €13. 
2. For the remaining €5,000 (the amount above €20,000 which falls under Tier 4), the margin rate is 0.16%. 

So, we have: 

0.16% of €5,000 = €8 

The total margin required: 

 €13 (for the first €20,000) + €8 (for the remaining €5,000) = €21. 

Understanding this calculation allows traders to accurately predict how much capital they need to maintain their positions and effectively manage their trading capital. 

How to View Dynamic Margin in LogixTrader 

To view the specific margin tiers and requirements for a particular symbol, LogixTrader users can simply navigate to the Specification section within the Watchlist. This ensures that you are fully aware of the margin requirements before executing your trades, making it easier to plan and manage your trading activities. 

Conclusion  

Dynamic Margin on LogixTrader provides traders with a more flexible, intuitive way to manage risk and leverage. By offering higher leverage for smaller trades and adjusting margin requirements as your positions grow, this feature helps you optimise your capital and maintain greater control over your trading decisions. 

Ready to get started with LogixTrader? Sign up today and experience the benefits of Dynamic Margin for yourself. 

Catch up on our latest LogixTrader video tutorials below: 

• Mastering Long and Short Position Drawing Tools on LogixTrader 
• Overview of the Trader's Toolbox on the LogixTrader Platform 
• How to Build a Simple Trend Following System on LogixTrader 
• Adding Indicators and Customising Your Charts in LogixTrader 
• How to Set Up Multiple Charts in LogixTrader 
• Guaranteed Stop Loss Order on LogixTrader

Take control of your forex trading journey by signing up for a LogixTrader Trading Account today.