For example, if you want to trade one lot of EUR/USD (100,000 units) with leverage of 1:100, the required margin is about $1,000. With leverage of 1:50, the same trade would need $2,000 margin. This helps traders immediately see how much of their balance will be tied up and whether they have sufficient free margin to open new trades. Traders use a margin calculator to plan position sizes properly, avoid margin calls, and ensure they aren’t over-leveraging their accounts. In short, it answers the question: “How much margin will my trade require, and do I have enough funds to cover it?”