I think I understand your question now.  The margin is the amount that is required to be in your account in order to trade the number of lots you wish.  For example, if you have a $10,000 account and are trading with 10% margin at 400:1 you can control $400,000 dollars ($10,000 * 10% * 400).  If that $400,000 drops to $391,000 (2.25%) you are out.  All of your money is at risk at all times.  The margin is just one parameter for controlling that risk.  If you were trading at 5% margin under similar circumstances you could only control $200,000 but it would take a move from $200,000 to $191,000 (4.5%) to knock you out.  You double your chance for survival.

With any highly leveraged investment you are going to have wild swings in equity.  This is just the nature of the beast.  The trick is to survive them.  Using a low margin percentage and reasonable leverage FreedomRocks should keep you in the game for the long-haul.  The only way to do an honest risk/reward analysis is to set your parameters, trade for 6 months to a year and see how it works out.  Every person's portfolio will have a different ratio depending on how they set it up. 

As a real world example, I am trading the EUR/USD, GBP/USD and USD/CHF using 10% margin at 400:1.  That is at the limit of my tolerance.  I would be happier around 5% to 7% but I was feeling "spunky" the day I set it up.  Still, I think that given the volatility of those pairs, I should be able to survive anything short of a disaster.  I am getting 47% annual interest for my trouble and at least that much again from trading.  That seems adequate reward for the rather small chance of a wipe-out. 

As an aside, some folks use a mental stop-loss to define their risk.  They will quite trading at a 20%, 30% or 40% drawdown.  I disagree with that approach for FreedomRocks as it really defeats the program I think.  Different strokes for different folks, however.

Hope that helps.