What is the Formula Used to Calculate Gold Trading Margin?
The following gold trading terms are used in the formula of how to calculate gold trading margin.
XAUUSD Margin, Margin Required, Equity, Used XAUUSD Margin and Free XAUUSD Trading Margin
What is Margin Required? : It is the amount of money your gold broker requires from you to open a position. It is expressed in percents.
What is Equity? : It is total amount of capital you have in your xauusd trading account.
What's Used Gold Trading Margin? : amount of money in your xauusd trading account that has already been used up when buying a gold lot, this contract is the one that is displayed in the open trades. As a trader you can't use this amount of money after opening a gold trade because you have already used it to open another trade and it is not available to you.
In other words, because your gold broker has opened up a position for you using the capital you've borrowed, you must maintain this usable margin for your account as a security to allow you to continue using this gold trading leverage he has given you.
What is Free Gold Trading Margin? : amount in your xauusd trading account that you can use to open new trades. This is the amount of money in your account that hasn't yet been gold trading leveraged because you have not yet opened a transaction with this money - this is also very important for you as a trader because it enables you as a trader to continue holding your open xauusd trades as will be described below.
Example of Formula for How to Calculate XAUUSD Margin in MT4
The gold trading margin examples on MT4 gold trading Platform below, the set gold trading leverage ratio is 100:1, the gold trading margin which is 1% is $2683.07, therefore the total amount controlled by gold trader is: $268,307 - this is because with this leverage the trader has used little of his money & borrowed the rest, with this set at 100:1, trader is using 1% of their capital, this 1% equals to $2683.07, if 1% is equal to $2683.07 then 100% is equal to $268,307
MetaTrader 4 Gold Trading Leverage Margin Calculation - What is the Formula Used to Calculate Margin?
Gold Trading Margin - $2683.07
Gold Trading Margin used to open trades in MT4 examples above
This gold trading Margin is 1% of the trade opened on MT4 software
To Know More about Gold Leverage & Margin - Read the Topics Below:
Gold Leverage & Margin Tutorial
