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What Happens When Your Free Trading Margin Gets To Zero?

What Happens When the Free Margin in Your Trade Account is Negative?

A xauusd margin call is when a trader's account free trading margin goes below the required gold margin level which's set by broker. This means because the free trading margin in the trader's account has dropped below the required gold margin level then the trader gets a margin call & some of the open trade transactions in gold trader's are closed by broker until this gold margin level goes back upto above the required gold trading margin level.

Some of the open trade transactions may be stopped out or all of the open positions may be stopped out if this gold trading margin call is automatically executed by broker.

What's Gold Margin Requirement Level?

Now if Your Leverage is 100:1

When trading if you as a trader have $1,000 dollars & use leverage option of 100:1 & buy 1 standard lot for $100,000 your trading margin on this trade is the $$1000 in your account, this is the money that you will lose out if your open position goes against you & the other $99,000 which is borrowed, the broker will closeout the open trade transactions mechanically using a Margin Call once your $1,000 has been taken by the market.

But this is if your online broker has set Zero % Gold Margin Requirement before liquidating your trades mechanically using this XAUUSD Margin Call.

What is 20% XAUUSD Gold Margin Requirement Level?

For 20% gold trading margin requirement before stopping out your trades mechanically using what is referred to as a Margin Call, then your trade positions will be stopped out once your account balance reaches $200- at $200 you'll get a trading margin call.

What's 50 % Margin Requirement Level?

For 50% prerequisite of this level before liquidating your trades mechanically using what is known as a margin call, then your transactions will be closed once your trading account balance drops to $500 - at $500 you will get a margin call.

What's 100 Percentage Margin Requirement Level?

If the online broker sets 100 Percent margin requirement of this level before liquidating your open trade positions mechanically/automatically using a Margin Call - at $1,000 you'll get a margin call, then your trade positions will be closed once your trading account balance reaches $1,000 dollars: Meaning the trade positions will closeout as soon as you execute a one standard contract/lot on this 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 gold trading margin requirement percentage is 100 percentage i.e. $1,000, henceforth your orders will immediately get closed using a Margin Call once your trading margin requirement falls below 100 percent.

Most brokers do not set 100 Percent gold trading margin requirement, but there are those brokers that set 100 Percent margin are not appropriate for you at all, even those who set 50 percent gold trading margin requirement are still not suitable. Select those set 20% gold trading margin requirements, in fact, those brokers that set their margin requirement at 20% XAUUSD Gold Margin Requirement are among some of the best because the likely hood that they close-out your trade position using a Margin Call is reduced and minimized just as is illustrated in the above example illustration.

To Read More about Leverage and XAU USD Margin - Study the Learn Lessons Below:

Leverage and XAU USD Margin Explained

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