How Do I Calculate the Margin Required?
Three example of how to calculate the margin requirement in xauusd trading.
Now if Your XAUUSD Trading Leverage is 100:1
When trading if you have $1,000 & use gold leverage option of 100:1 & buy 1 standard lot for $100,000 your margin on this trade is the $1000 dollars in your xauusd account, this is the money that you will lose if your open trade goes against you the other $99,000 that is borrowed, the broker will close the open gold trades automatically using a Gold Margin Call once your $1,000 has been taken by the xauusd market.
But this is if your gold broker has set 0% Gold Margin Requirement before closing your xauusd trades automatically using this Margin Call.
Examples 1: How to Calculate What is 20% Gold Margin Requirement Level
For 20% margin requirement before closing your xauusd trades automatically using a Margin Call, then your trades will be closed once your trading account balance gets to $200 - at $200 you'll get a margin call.
Examples 2: How to Calculate What is 50% Gold Margin Requirement Level
For 50% requirement of this level before closing your xauusd trades automatically using a margin call, then your transactions will be closed once your account balance gets to $500 - at $500 you will get a margin call.
Example 3: How to Calculate What is 100% Gold Margin Requirement Level
If the broker sets 100% margin percentage level requirement of this level before automatically closing your open trade positions automatically using what is known as a margin Call - at $1,000 you will get a margin call, then your xauusd trades will be closed once your account balance gets to $1,000: Meaning the xauusd trades will close-out as soon as you execute a 1 standard lot on this gold account because even if you as a trader you pay 10 dollars spread your gold account balance will get to below $1,000 and the needed margin requirement percent is 100% i.e. 1,000 dollars, therefore your gold orders will immediately get closed using a Margin Call once your margin requirement falls below 100%.
Most gold brokers do not set 100% margin requirement, but there are those gold brokers that set 100% margin percent level requirement are not suitable for you at all, even those that set 50% trading margin requirement level are still not suitable. Choose those xauusd brokers that set their margin level requirement at 20% trading margin level, in fact, those xauusd brokers which set their margin requirement at 20% Gold Trading Margin Requirement are some of the best because the likely hood they close-out your trade using a Gold Margin Call is reduced as shown in the example above.
To Know More about Gold Leverage & Margin - Read the Topics Below:
Gold Leverage & Margin Lesson
