How Do I Calculate XAUUSD Gold Margin Requirement in XAUUSD
Now if Your Leverage is 100:1
When xauusd if you have $1,000 & use leverage ratio 100:1 and buy 1 standard contract and lot for $100,000 your margin on this xauusd transaction is the $1000 in your account, this margin is the money that you will lose if your open trade position goes against you : the other $99,000 that's borrowed, they will close out the open trades mechanically once your $1,000 has been taken by the market.
But this is if your broker has set 0 % Margin Requirement before stopping out your trade positions mechanically.
For 20 percent prerequisite before closing out your open positions mechanically/automatically, then your xauusd transactions will be closed once your balance gets to $200
For 50% prerequisite of this level before closing out your transactions mechanically/automatically, then your xauusd transactions will be closed once your balance gets to $500
If they set 100% requirement of this level before closing out your open positions mechanically/automatically, then your trade will be stopped out once your balance gets to $1,000: Meaning the trade transaction will close out as soon as you the trader executes it because even if you pay a 1 pip spread then your account balance will drop to $990 dollars and the needed margin % is 100% i.e. $1,000, henceforth your open trade positions will immediately get closed out.
Most brokers do not set 100 Percent requirement, but there are those who set 100% or 50% are not suitable for you at all, choose those set 20% margin requirements, in fact, those brokers that set their margin requirement at 20 percent are among the best since due to and because of the likely hood they stop out your open position is reduced and minimized just as is displayed and illustrated and shown on examples below.
To know about this margin level which is calculated by your MT4 automatically - the MetaTrader 4 Platform Software will indicate this as "Gold Margin Requirement", This will be displayed as a percentage the higher the margin percentage the less likely your open positions are to get closed.
For Examples if - for a broker requiring 20% margin requirement
Using 100:1 leverage
If trading leverage is 100:1 & you transact 1 Mini Lot, equals to $10,000 dollars
$10,000 (mini lot) divided by 100:1, used capital is $100 dollars
Calculation:
= Capital Used * Percentage
= $1,000/$100 * Percent(100)
XAUUSD Margin Requirement = 1000%
Investor and Trader has 980% above the margin required amount
Using 10:1
If leverage is 10:1 & you transact 1 Mini Lot, equals to $10,000
$10,000 (mini lot) divided by 10:1, used capital is $1000
Calculation:
= Capital Used * Percentage
= $1,000/$1000 * Percentage
XAUUSD Margin Requirement = 100%
Investor and Trader has 80% above the margin required amount
The margin example illustrated and shown below, the set leverage is 100 : 1, the margin which is 1% is $2683.07, therefore the total sum controlled by the trader is: $268,307 - this is because with this leverage the trader has used little of his money and borrowed the rest of the amount, with this set at 100:1 ratio, the trader is using 1 % of their trading capital, this 1% equals to $2683.07 dollars, if 1% is equal to $2683.07 then 100% is equivalent to $268,307
How to Calculate Margin in Gold - How to Calculate XAUUSD Gold Margin Requirement in XAUUSD
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