what is margin level in trading, when should I be worried about it?

Margin level is a measure of how much money is in your trading account vs how much money was needed to open your current trade. If the initial margin required to open a trade is $10 and your account balance after opening the trade is $90 then your margin level will be ($90/$10) x 100 = 900%. In trading, the ideal margin level should be above 100%.

Margin Level vs Initial Margin

When you open a new trade, your broker restricts access to some of your account balance so that you cannot withdraw it. The restricted fund is called "initial margin".

If your margin level falls below 100%, your broker will begin to use the restricted funds to offset any losses from your open trades. If the losses are too large, your broker will close some of your open trades to free up more money. However, if your trade ends in a profit, the restricted funds are released to you so you can withdraw it.

Margin level is like your fuel gauge, showing you how much gas you have left in the tank. Margin level only shows up when you open a trade, it doesn't show up when you are not trading. A good margin level should be higher than 100% or you risk receiving a margin call requiring you to deposit more funds into your account or your unprofitable trades will be closed.

Every broker has a stop out level which is basically a percentage that if your margin level falls to, all your trades will be closed automatically. The broker I use has a 50% stop out level so if my margin level falls to 50% due to unprofitable trades, my broker will close all my trades.

In some jurisdictions like the UK, Europe & Australia, the financial market regulators set the stop out level for brokers to apply to their clients' accounts.