Trade Gold Trading

How Do I Calculate XAUUSD Trading Margin

What's XAUUSD Gold Margin Account?

The meaning & definition of Leverage can be defined as having the ability of controlling a big amount of money while using very little of your money/funds & borrowing the rest - this is what makes the market to attract many traders.

We shall explain leverage first and then explain margin in this learning how to calculate leverage & gold margin tutorial.

Example:

We shall use this example illustration to illustrate what trading leverage is? If your online broker provides you leverage option of 100:1 (this is the best option to choose & select as the maximum for any account)

This means you borrow $100 for each $1 you have on your account.

In other terms your online broker provides you $100 dollars for each $1 dollar on your account. This is what is known as leverage.

This means that if you open an account with $1,000 and your leverage option is 100:1, then you get $100 for every $1 you which you have on your account, the total amount which you will control is:

If for 1 dollar the online broker provides you 100

Then if you have 1,000 you will get a total of:

$1,000 * 100 = $100,000

Now you control 100,000 of Investment

Most new traders ask what leverage is best leverage for $1,000 dollars, or $2,000 dollars, or $5,000 account? - Best leverage ratio to choose when opening a real account is always 100:1 and not 400:1.

What's XAUUSD Gold Margin?

This is the amount of money required by your broker to allow you as a trader to continue trading with borrowed amount.

In other terms the question what's gold margin in Gold Trading? can be explained as money required to cover open trades and is denoted in percentage. For 100:1, the amount you will control is $100,000 as expounded in the above illustration.

Now can you compare someone investing $1,000 with another one that is investing $100,000? Obviously You Can't. This is how it works, it takes you from that retail investor investing $1,000 to the one investing $100,000. Where does the extra money originate and come from? : You borrow itfrom your broker in what is simply referred to as Leverage. This funds that you borrow, you as a trader borrow it against the $1,000 of your own funds that you deposit with your broker. If you were to illustrate what this gold leverage means - then it's the ability to control a large amount of money using very little of your own money and borrowing the rest. Otherwise, if you were to trade without this gold leverage it would not be as profitable as it is, in fact you as a trader can still select not to use leverage, using 1:1 trading leverage option but you wouldn't make money & it would take too long to make any trading profits.

Example of how to calculate leverage & gold margin:

Gold Margin required in this instance is $1,000 (your capital) if it's denoted as a % of $100,000 dollars which you now control it is:

If leverage = 100:1

1,000 / 100,000 * 100= 1 %

XAU/USD Margin required = 1%

(1/100 *100= 1 %)

"Trade FX Trading - Please simplify a little bit because I am a Beginner Trader"

(Simplify - your funds is $1,000 after deploying leverage you now control $100,000 - $1,000 is what percentage of $100,000 - it is 1%) that's your trading margin requirement for your trading account.

What's Gold Margin Account? - What is XAUUSD Gold Margin Trading? - How to Calculate Margin - Gold Margin Calculator - What is Gold Margin Account? - What is Free Margin Level in Gold Trading? - What's Used XAU USD Margin Level in Gold Trading? - What's Gold Margin in Gold Trading?

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