Margin Call Definition
A margin call is when a gold trader's account free margin goes below required margin level that is set by xauusd trading broker. This means that because the free margin in the trader's account has gone below the required margin level then the trader gets a margin call & some of the open trades in the trader's are closed by the broker until this trading margin percentage level goes back up above the required margin percent area.
Some of the open trades may be closed or all of the open trades might be closed if this margin call is automatically executed by the broker.
What is XAUUSD Trading Margin Requirement Level?
Now if Your Gold Trading Leverage is 100:1
When trading if you have $1,000 & use gold leverage option of 100:1 and buy 1 standard lot for $100,000 your margin on this trade is the $1000 dollars in your xauusd trading account, this is money which you will lose if your open trade goes against you the other $99,000 that is borrowed, xauusd broker will close the open gold trade transactions automatically using a Gold Trading Margin Call once your $1,000 has been taken by the xauusd trading market.
But this is if your gold broker has set 0% Gold Trading Margin Requirement before closing your xauusd trades automatically using this Margin Call.
What's 20% Gold Margin Requirement Level?
For 20% margin requirement before closing your xauusd trades automatically using a Margin Call, then your trades will be closed once your account balance gets to $200 - at $200 you'll get a margin call.
What is 50% Gold Margin Requirement Level?
For 50% requirement of this level before closing your xauusd trades automatically using a margin call, then your trades will be closed once your account balance gets to $500 - at $500 you will get a margin call.
What is 100% Gold Margin Requirement Level?
If the 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 xauusd trades will be closed once your account balance gets to $1,000: Explanation the xauusd trades will close-out as soon as you execute a 1 standard lot on this gold trading account because even if you as a trader you pay 10 dollars spread your gold trading account balance will get to below $1,000 & the needed margin requirement percent is 100% i.e. 1,000 dollars, therefore your gold orders will immediately get closed using a Margin Call once your margin requirement falls below 100%.
Most gold brokers do not set 100% margin requirement, but there are those gold brokers that set their margin requirement level at 100 percent margin aren't suitable for you at all, even those that set 50% trading margin requirement level are still not suitable. Choose those xauusd brokers that set their margin level requirement at 20% trading margin level, in fact, those xauusd brokers which set their margin requirement at 20% Gold Trading Margin Requirement are some of the best because the likely hood they close-out your trade using a Gold Trading Margin Call is reduced as shown in the example above.
To Know More about Gold Leverage & Margin - Read the Topics Below:
Gold Leverage & Margin Tutorial
