Trade Gold Trading

What Happens When Your Free Trading Margin Gets To Zero?

What Happens When the Account Free Margin is Negative?

A margin call is when a trader's trading account free margin moving below the required margin level that is set by the online broker. This means that because the free trading 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 trade transactions in gold trader's are closed by the online broker until this margin level goes back up to above the required gold trading margin level.

Some of the open trade transactions might be closed or all of the open trade transactions might be liquidated if this trading margin call is automatically executed by the online broker.

What is Margin Requirement Level?

Now if Your Leverage is 100:1

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

But this is if your online broker has set 0 % Margin Requirement before liquidating your trades mechanically/automatically using the Margin Call.

What is 20 % Margin Requirement Level?

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

What is 50% Margin Requirement Level?

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

What is 100% Margin Requirement Level?

If the online broker sets 100% margin requirement of this level before liquidating your open position 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 account balance drops to $1,000 dollars: Meaning the trades will liquidate as soon as you as a gold trader execute a 1 standard contract on this account because even if you as a trader you pay 10 dollars spread your account balance will get to $990 dollars and the needed margin requirement % is 100% that is $1,000, therefore your orders will immediately get liquidated using a Margin Call once your trading margin requirement falls below 100 %.

Most brokers do not set 100 % gold trading margin requirement, but there are those brokers that set 100% margin are not good-enough for you at all, even those who set 50 % gold trading margin requirement are still not good-enough. Select and Choose those set 20% gold trading margin requirements, in fact, those brokers that set their margin requirement at 20% Margin Requirement are among some of the best since because of the likely hood they stop out-out your trade using a Margin Call is reduced and minimized as cited in the illustration presented above.

To Read More about Leverage & Margin - Read the Learn Tutorials Described Below:

Leverage & Margin Explained

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