How to Calculate Gold Trading Margin Requirement in Gold
Now if Your XAUUSD Trading Leverage is 100:1
When gold trading if you have $1,000 & use option 100:1 and buy 1 standard lot for $100,000 your margin on this gold trade is the $1000 dollars in your xauusd trading account, this margin is the money that you will lose if your open trade goes against you the other $99,000 that is borrowed, they will close the open gold trades automatically 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.
For 20% requirement before closing your xauusd trades automatically, then your gold trade transactions will be closed once your balance gets to $200
For 50% requirement of this level before closing your xauusd trades automatically, then your gold trade transactions will be closed once your balance gets to $500
If they set 100% requirement of this level before closing out your open trade positions automatically, then your gold trade will be closed once your balance gets to $1,000: Meaning the trade will close out as soon as you execute it because even if you pay 1 pips spread your account balance will get to $990 & the needed percentage is 100% i.e. 1,000 dollars, therefore your orders will immediately get closed.
Most gold brokers do not set 100% requirement, but there are those that set 100% or 50% are not suitable for you at all, choose those set 20% margin requirements, in fact, those xauusd brokers which set their margin requirement at 20% are some of the best because the likely hood they close-out your open gold trade is reduced as displayed in the example below.
To know about this margin level which is calculated by your MetaTrader 4 platform automatically - the MetaTrader 4 Gold Trading Platform will display this as "Gold Margin Requirement", This will be displayed as a percent the higher the margin percent the less likely your trades are to get closed.
For Examples if - for a broker requiring 20% margin requirement
Using 100:1 leverage
If gold leverage is 100:1 & you transact 1 Mini Lot, equals to $10,000
$10,000 dollars(mini lot) divide by 100:1, your used trading capital is $100
Calculation:
= Capital Used * Percentage(100)
= $1,000/$100 * Percentage(100)
Gold Margin Requirement = 1,000 %
Investor has 980% above the gold margin required amount
Using 10:1
If gold leverage is 10:1 & you transact 1 Mini Lot, equals to $10,000
$10,000 dollars(mini lot) divide by 10:1, your used capital is $1000
Calculation:
= Capital Used * Percentage(100)
= $1,000/$1000 * Percent(100)
Gold Trading Margin Requirement = 100 %
Investor has 80% above the gold margin required amount
The margin trading example illustrated and explained below, the set gold trading leverage is 100 : 1, the gold trading margin which is 1% is $2683.07, therefore the total amount controlled by the trader is: $268,307 - this is because with this leverage the trader has used little of his money & borrowed the rest, with this set at 100:1, the trader is using 1% of their capital, this 1% equals to $2683.07, if 1% is equivalent to $2683.07 then 100% is equivalent to $268,307
How to Calculate Margin in Gold Trading - How to Calculate Gold Trading Margin Requirement in Gold
