XAUUSD MT5 Margin Level Calculation Formula
This example explains margin in MT5 software. It covers gold margin, required gold margin, trading equity, used margin, and free margin.
Gold Margin, Required Gold Margin, Equity, Used Margin & Free Gold Margin
What's Required Margin? : Required Margin is the amount of money your broker requires from you to open a position. It's denoted/expressed in percentage.
What Constitutes Gold Equity? : In XAUUSD trading, Equity represents the aggregate capital currently held within your trading account balance.
What is used margin? Used gold margin is the money from your account tied up in an open trade lot. It shows in your open positions. As a trader, you cannot use this money again. It stays locked until the trade closes.
In other terms, because your online broker has opened up a trade position for you using capital you've borrowed, you as a trader must sustain this used margin as a collateral to allow you as a Gold trader to continue using this leverage the broker has issued you.
What's Gold Free Margin? : XAUUSD Free Margin is the amount of money in your account which you can use to open/execute new positions. XAUUSD Free Gold Margin is the amount of money in your account that hasn't yet been leveraged because you have not yet opened a trades with this money - this Trading Free Gold Margin is also very important for you as a trader because it facilitates you to continue holding your open trade positions as is explained below.
Example illustration of What's Margin on MT5 Platform
Using the margin illustrations for the MetaTrader 5 platform below, with the chosen leverage set at 100:1, the necessary margin, equivalent to 1%, is $2,683.07. Consequently, the total cumulative value controlled by the online trader is calculated as $268,307. This outcome stems from the trader employing only a fraction of their personal capital, borrowing the remainder from their broker, due to this leverage configuration. With the 100:1 leverage ratio, the online trader is utilizing 1% of their available trading capital, which corresponds to $2,683.07: if 1% equates to $2,683.07, then 100% is valued at $268,307.
MT5 Leverage Margin Calculator - Calculating Margin Levels for XAUUSD Gold on MT5 - The Formula for MT5 Margin Level Calculation - XAUUSD MT5 Margin Level Determination.
Free Margin - $13,433.48
Free Gold Margin that can be used by a trader to execute new trades on MetaTrader 5 as is displayed and shown on the example revealed above.
Used Margin - $2683.07
XAU/USD Margin which has been already used up by the trader to open trade positions in MetaTrader 5 platform as is displayed on the example revealed above.
For in-depth understanding of Leverage and Margin concepts, consult the educational trading lessons compiled below:
What is MT5 Margin % on MT5 Explained
Learn More Lessons and Topics:
- GER 30 Trading System Guide
- Examples of How to Setup Trades and How to Open How to Add a Trade Gold in MT4 Software Platform
- SX 50 Index Strategy Training Tutorial Download
- Demarker Analysis in FX Charts
- USD/JPY Trading Strategy USDJPY Trading Method
- How Do I Login to MQ5 Trading Account?
