Gold Leverage & Margin, Margin Required, Equity, Used Gold Trading Margin & Free margin

Margin required : It's the amount of money your gold broker requires from you to open a position. It is expressed in percents.

Equity : It's total amount of capital you have in your account.

Used margin : amount of money in your trading account that has already been used up when buying a gold lot, this contract is the one that is displayed in the open trades. As a trader you cannot use this amount of money after opening a trading transaction because you have already used it & it is not available to you.

In other words, because your gold broker has opened up a position for you using the capital you've borrowed, you must maintain this usable margin for your account as a security to allow you to continue using this gold trading leverage he has given you.

Free margin : amount in your trading account that you can use to open new trades. This is the amount of money in your account that hasn't yet been gold leveraged because you've not yet opened a trade with this money - this is also very important for you as a because it enables you to continue to hold your open trades as will be described below.

However, if you over use xauusd leverage, this free margin will drop below a certain percent at which your xauusd broker will have to close all your positions automatically, leaving you with a big loss. Gold broker at this point closes all your position because if your positions are left open they would lose the money you've borrowed from them.

This is why you should always make sure you have a lot of free margin. To do this never trade more than 5 percent of your xauusd trading account, in fact 2 percent is recommended.