Free Margin

Free margin equals your account equity minus the margin used by open positions. It represents the capital available to open new trades or absorb floating losses on existing positions. Monitoring free margin is how traders make sure they have room for additional setups and can withstand adverse price moves without triggering a margin call.

Free margin fluctuates in real time as positions gain or lose value. When trades move in your favor, equity rises, and free margin grows. When floating losses develop, equity drops, and free margin shrinks. If free margin falls to zero, you cannot open new positions and any further losses push you toward a margin call. Having meaningful free margin at all times is a sign of prudent leverage and position sizing.

For example, if your account has $10,000 of equity and open positions use $2,500 of margin, your free margin is $7,500. You could open additional positions requiring up to $7,500 of margin, though doing so would reduce your buffer against floating losses. If a trade moves against you by $2,000, your equity drops to $8,000, used margin stays roughly the same, and free margin becomes $5,500. You still have room to manage the position or add to it if the strategy calls for it.

In copy trading, free margin management happens implicitly through systematic position sizing. SteadyFlowFX's 9 algorithms take positions calibrated to leave adequate free margin across the 8 currency pairs traded. The verified Myfxbook 34.2 percent max drawdown reflects how the strategy respects margin limits through volatile periods. Subscribers should periodically check their free margin and avoid layering manual trades on top of copied positions because doing so can consume free margin needed to absorb drawdown cycles that are part of the 12 percent average monthly net return track record.