What Does 100% Gold Margin Requirement Mean?
Margin requirement is the percentage of the trade transaction value that a trader must maintain so as to continue holding the open trades that have been opened using xauusd trading leverage.
Example of How Does 100% XAUUSD Margin Requirement Work?
Now if Your Gold Trading Leverage is 100:1
When trading if you have $1,000 & use option 100:1 & buy 1 standard lot for $100,000 your gold trading margin on this trade is the $1000 dollars in your xauusd trading account, this is the money that you will lose if your open trade goes against you the other $99,000 that is borrowed from the broker, the broker 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% Gold Margin Requirement before closing your xauusd trades automatically, then your trades will be closed once your trading account balance gets to $200
For 50% Gold Trading Margin Requirement of this level before closing your xauusd trades automatically, then your trades will be closed once your trading balance gets to $500
If the broker sets 100% Gold Trading Margin Requirement of this level before closing your open trades automatically, then your trade will be closed once your balance gets to $1,000: Explanation the gold 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 gold brokers that set 100% Gold Trading Margin Requirement or 50% Gold Trading Margin Requirement 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 closeout your gold trade is reduced as displayed in the example above.
To Know More about Gold Leverage & Margin - Read the Topics Below:
Gold Leverage & Margin Lesson
