Stop Out XAUUSD Level
Negative Free Margin XAUUSD
A XAUUSD Trading Margin call is when a trader's account free XAUUSD Trading Margin goes below the required XAUUSD Trading Margin level that is set by the broker. This means because the free Margin in the trader's account has gone below the required XAUUSD Trading Margin level then the trader gets a Trading Margin call and some of the open trades in the trader's are closed by broker til this Trading Margin level goes back up to above the required XAUUSD Trading Margin level.
Some of the open trades may be closed out or all of the open trades might be closed-out if this Trading Margin call is automatically executed by the broker.
What's Margin Requirement Level?
Now if Your Leverage is 100:1
When trading if you have $1,000 & use leverage of 100:1 & buy 1 standard lot for $100,000 your Trading Margin on this trade is the $1000 in your account, this is money which you will lose is your open trade moves against you the other $99,000 that is borrowed, the broker will close the open trade transactions automatically using a Margin Call once your $1,000 has been taken out by market.
But this is if your broker has set 0 % Trading Margin Requirement before stopping out your trade transactions automatically using this Margin Call.
What is 20 % Trading Margin Requirement Level?
For 20 % Trading Margin Requirement before stopping out your trades automatically using what is known as Margin Call, then your trade transactions will be stopped out once your trading account balance reaches $200 - at $200 you'll get a Margin call.
What is 50% Trading Margin Requirement Level?
For 50 % requisite of this level before stopping out your trade transactions automatically using a Trading Margin call, then your positions will be stopped out once your balance gets to $500 - at $500 you will get a Margin call.
What is 100% Trading Margin Requirement Level?
If the broker sets 100 % Trading Margin Requirement of this level before closing out your open positions automatically using a Margin Call - at $1,000 you'll get a Trading Margin call, then your trades will be closed once your account balance reaches $1,000: Meaning the trade transactions will close-out as soon as you execute a one standard lot on this trading account because even if you pay one pips spread your account balance will get to $990 and the needed Trading Margin Requirement percentage is 100% i.e. $1,000, hence your orders will immediately get closed using a Margin Call once your Trading Margin Requirement falls below 100 %.
Most brokers don't set 100 Percent Trading Margin Requirement, but there are those brokers that set 100 Percent XAUUSD Trading Margin aren't suitable for you at all, even those that set 50 percent Trading Margin Requirement are still not suitable. Select those set 20% Trading Margin Requirement, in fact, those brokers which set their margin requisite at 20 % Trading Margin Requirement are the best because the likelihood that they stop out your open trade transaction using a Margin Call is reduced as displayed in the above example.
To Learn & Know More about Leverage & Margin - Study the Learn Topics Described Below:
Leverage and Trading Margin Described
