In Astral, Margin Level (Initial Margin Ratio) is calculated by dividing the account equity by the used margin. It represents the ratio of available margin to the used margin in a trader's account. This ratio indicates the leverage level in the trader's account, i.e., the proportion of borrowed funds used relative to the trader's own capital. The general formula for calculating the account margin ratio is as follows:
Margin level = Equity / Margin
Where:
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Equity: Equity refers to the trader's account balance at a specific moment, including both realized and unrealized profits and losses. It represents the total funds in the account.
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Margin: Margin is the amount of margin that the trader has already utilized to support the current open positions. This includes the initial margin paid by the trader at the time of opening a position and the maintenance margin required for the current positions.
When the margin is 0, meaning there are no open positions, the margin level is 0. This indicates that there is no margin used to support any open positions, and all funds in the account are available.
Understanding the margin level helps traders assess their risk tolerance and make appropriate trading decisions based on their individual circumstances. A higher margin level may imply that the trader has more funds available for new positions or taking on more risks, but it also increases the risk associated with leveraged trading. Therefore, traders should manage their margin cautiously and ensure that their risk control strategies are reasonable and effective.