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What Happens in After You Have no Free Margin Left?

If you run out of free margin in account you'll get a margin call and some or all of your open trade transactions will be automatically closed or stopped out by your broker.

A margin call forms when a trader's trading account free margin goes below required margin level that is set by xauusd broker. This means that because free margin in the trader's account has gone below the required margin level then the trader gets a margin call and some of the open trades or all of the open trades in trader's are closed by online broker until this margin percentage level goes back up above the required margin percent area.

What is XAUUSD Margin Requirements Level?

Now if Your Leverage is 100:1

When trading if you have $1,000 and use leverage option of 100:1 and buy 1 standard lot for $100,000 your margin on this trade is the $1000 dollars in your account, this is money which you will lose if your open trade moves against you and the other $99,000 that is borrowed, broker will close the open trade positions automatically using a Margin Call once your $1,000 dollars has been taken by market.

But this is if your online broker has set 0 percent Gold Margin Requirements before closing out your xauusd trades automatically using the Margin Call.

What's 20% Margin Requirements Level?

For 20 % margin requirement before closing out your xauusd trade transactions automatically using what's known as Margin Call, then your trades will be stopped out once your account balance gets to $200 - at $200 you'll get a margin call.

What's 50% Margin Requirements Level?

For 50 % requirement of this level before liquidating your xauusd trade transactions automatically using what's referred to as margin call, then your trades will be liquidated once your trading account balance gets to $500 - at $500 you'll get a margin call.

What is 100% Margin Requirements Level?

If the online broker sets 100% trading margin percent level requirement of this level before automatically closing your open positions automatically using a margin Call - at $1,000 you will get a margin call, then your trades will be liquidated once your trading account balance reaches $1,000: Explanation the trades will stop out as soon as you execute a one standard contract on this trading account because even if you as a trader you pay $10 spread your trading account balance will get to below $1,000 dollars and the needed margin requirement percent% is 100 percentage% i.e. $1,000, thenceforth your orders will immediately get closed out using a Margin Call once your margin requirement falls below 100%.

Most online brokers do not set 100% margin requirement, but there are those brokers that set their margin requirement level at 100 percent% margin are not good for you at all, even those that set 50% trading margin requirement level are still not suitable. Choose those brokers that set their margin level requirement at 20 % trading margin level, in fact, those brokers which set their margin requirement at 20% XAUUSD Margin Requirement are some of the best because the likely-hood they close-out your trade using a Margin Call is reduced as shown in the above example.

To Learn More about Leverage and Margin - Read the Topics Below:

XAUUSD Leverage and Margin Guide

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