MetaTrader 4 Gold Trading Margin Level : Example of How to Calculate Gold Trading Leverage in MetaTrader 4
Margin required in this case is 1,000 dollars (your money) if it's expressed as a percentage of 100,000 dollars which you control it is:
If gold trading leverage = 100:1
1,000 / 100,000 * 100= 1%
Margin required = 1%
(1/100 *100= 1%)
"Trade Forex Trading - Please simplify because I am Beginner"
(Simplify - your gold trading capital is $1,000 after gold leverage you control $100,000 - $1,000 is what percent of $100,000 - it is 1%) that's your gold trading margin requirement for your xauusd trading account.
The gold trading margin 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
MetaTrader 4 Gold Margin Level : Example of How to Calculate Gold Leverage in MetaTrader 4
- If = 50:1 Gold Leverage - Used Gold Trading Leverage
Then gold margin requirement = 1/50 *100= 2%
If you have $1,000,
1,000* 50 = $50,000.
1,000 / 50,000 * 100= 2%
(Simplify - your gold trading capital is $1,000 after gold leverage you now control $50,000 - $1,000 is what percentage of $50,000 - it is 2 %) that's your gold trading margin requirement
- If = 20:1 Gold Trading Leverage - Used Gold Trading Leverage
Then the gold trading margin requirement = 1/20 *100= 5%
If you have $1,000,
1,000* 20 = $20,000.
1,000 / 20,000 * 100= 5%
(Simplify - your gold trading capital is $1,000 after gold leverage you now control $20,000 - $1,000 is what percent of $20,000 - it's 5 %) that's your gold trading margin requirement
- If = 10:1 Gold Trading Leverage - Used Gold Trading Leverage
Then the gold margin requirement is = 1/10 *100= 10%
If you have $1,000,
1,000* 10 = $10,000.
1,000 / 10,000 * 100= 10%
(Simplify - your gold trading capital is $1,000 after gold leverage you now control $10,000 - $1,000 is what percent of $10,000 - it's 10 %) that is your gold trading margin requirement
What's Difference Between Maximum Gold Leverage & Used XAUUSD Trading Leverage?
However, you should note that there's a difference between maximum gold trading leverage ( gold trading leverage given by your xauusd trading broker which is the highest gold leverage you can trade with if you choose to) & used gold trading leverage ( gold leverage depending on the lots you have opened/open trades). One is the broker's (Maximum Gold Leverage) & the other is gold trader's (Used Gold Trading Leverage). To explain this gold trading used xauusd leverage & maximum gold trading leverage concept we shall use the xauusd trading example above:
If your gold broker has given you 100:1 Maximum Gold Trading Leverage, but you only open a trade of 10,000 dollars then Used Gold Trading Leverage is:
10,000 dollars: 1,000 dollars (your money)
10:1
Your have used 10:1 Gold Trading Leverage, but your maximum gold leverage is still 100:1 Gold Trading Leverage. This means that even if you are given 100:1 Maximum Gold Trading Leverage or 400:1 Maximum Gold Trading Leverage, you do not have to use all of it. It is best to keep your used gold trading leverage to a maximum of 10:1 but you'll still choose 100:1 maximum gold leverage option for your gold trading account. The extra gold trading leverage will give you what we call Free Gold Trading Margin, As long as you have some Free margin on your gold trading account then your open xauusd trades will not get closed by your xauusd trading broker because this margin requirement will remain above the required level.
When it comes to gold trading one of your rules: gold money management guidelines on your gold trading plan should be to use gold trading leverage below 5:1.
In the above MetaTrader 4 gold trading screenshot example, the trader is using $2683.07, total controlled amount is $268,307, but gold trading account equity is $16,116.55, therefore used gold leverage is ( $268,307 divide by 16,116.55 ) = 16.64 : 1
16.64 : 1 Used Gold Trading Leverage
Gold Margin accounts allows traders to control a large amounts of gold trading units using leverage using little of their own capital while borrowing the rest
Obtaining this gold trading account will enable you to borrow money from the broker to trade xauusd trading lots with.
Amount of borrowing power your trading account gives you what is known as " gold leverage", and is usually expressed as a ratio - a ratio of 100:1 trading leverage means you can control resources worth 100 times your deposit amount.
What this means in Gold Trading terms is that with 1 % margin in your gold account you can control a trade worth $100,000 with a $1,000 deposit.
However, Trading this margin gold trading account increases both potential for trading profits as well as losses. In Gold Trading you can never lose more than you deposit, losses are limited to your deposits and usually online brokers will close-out a trade which extends beyond your deposit amount by executing a margin call. Gold traders must therefore try to keep their margin requirement level above that required. By using gold money management guide-lines & keeping your used gold leverage below 5:1.
