Margin Call Level
What Happens When Free Gold Margin is Negative?
A margin call is when a xauusd trader's account free margin goes below the required margin level that's set by gold broker. This means that because the free margin in xauusd trader's account has gone below the required margin level then trader gets a margin call and some of the open trades in the trader's are closed by the broker until this margin level requirement goes back up to above the required margin level.
Some of the open trades may be closed or all of the open trades may be closed-out if this margin call is automatically executed by gold trading broker.
What's XAUUSD Margin Requirement Level?
Now if Your Gold Trading Leverage is 100:1
When trading if you have $1,000 & use leverage of 100:1 and buy 1 standard xauusd lot for $100,000 your margin on this xauusd trade transaction is $1000 dollars in your gold account, this is money which you will lose is your open xauusd trade goes against you the other $99,000 that's borrowed, the broker will close out the open trades automatically using a Margin Call once your $1,000 has been taken by the gold market.
But this is if your xauusd broker has set 0% XAUUSD Margin Requirement before closing your gold trades automatically using this Margin Call.
What is 20% XAUUSD Margin Requirement Level?
For 20% margin requirement before closing your gold trades automatically using a Margin Call, then your gold trades will be closed once your account balance gets to $200 - at $200 you'll get a margin call.
What's 50% XAUUSD Margin Requirement Level?
For 50% requirement of this level before closing your gold trades automatically using a margin call, then your trades will be closed once your account balance gets to $500 - at $500 you'll get a margin call.
What's 100% XAUUSD Margin Requirement Level?
If the broker sets 100% margin requirement of this level before closing out your open trade positions automatically using a Margin Call - at $1,000 you'll get a margin call, then your gold trades will be closed once your account balance gets to $1,000: Meaning gold trades will close-out as soon as you execute a 1 standard xauusd lot on this xauusd account because even if you pay 10 dollars spreads your xauusd account balance will get to $990 & the needed margin requirement percentage is 100% that is 1,000 dollars, therefore your xauusd orders will immediately get closed using a Margin Call once your margin requirement falls below 100%.
Most xauusd brokers do not set 100% margin requirement, but there are those xauusd brokers that set 100% trading margin requirement level aren't suitable for you at all, even those that set 50% trading margin requirement level are still not suitable. Select those trading brokers set their margin level requirement a 20% margin requirement, in fact, those gold brokers that set their margin requirement at 20% XAUUSD Margin Requirement are the best because the likely hood they closeout your trade using a Margin Call is reduced as shown in the example above.
To Learn & Know More about XAUUSD Leverage & Margin - Read the Learn XAUUSD Trading Topics Explained Below:
XAUUSD Leverage & Margin Described
