What's Gold Trading Margin?
Margin is the amount of money required by your gold broker so as to allow you to continue trading with borrowed amount in your xauusd trading account.
In other words the question what is margin in Gold Trading? can be described as money required to cover open xauusd trades and is expressed in percentage. For 100:1, the amount you will control is 100,000 dollars if your gold account capital is $1,000.
Now can you compare someone investing $1,000 with another one that is investing $100,000? Obviously Not. This is how it works, it takes you from that retail investor investing $1,000 to that one investing $100,000. Where does this extra money originate from? : You borrow itfrom your gold broker in what's simply referred to as Gold Trading Leverage. This money that you borrow, you borrow it against the $1,000 dollar of your own that you deposit with your gold broker when you open a xauusd trading account. If you were to explain what this means - then it is the ability to control a big amount of money using very little of your own money and borrowing the rest. Otherwise, if you were trade Gold Trading without this gold trading leverage it would not be as profitable as it is, in fact you can still choose not to use xauusd trading leverage, using the 1:1 gold leverage option but you would not make money it would take too long to make any profit in xauusd trading.
Examples of how to calculate Margin:
Gold Margin required in this case is 1,000 dollars (your money) if it's expressed as a percent of 100,000 dollars which you control it is:
If leveraging = 100:1
1,000 / 100,000 * 100= 1%
Gold Trading Margin required = 1%
(1/100 *100= 1%)
How to Calculate Margin - What is Margin?
