What's XAUUSD Margin Requirement?
Margin Level XAUUSD Calculator - MT4 Margin Level Percentage Calculator - Calculating Margin Example on MetaTrader 4.
This learn xauusd tutorial will explain What is XAUUSD Margin Requirements in gold trading & how it is calculated in the MT4.
Examples of How to Calculate Margin Level Percentage in MT4
If leverage = 100:1
1,000 / 100,000 * 100= 1 percent
Margin required = 1 percent
(1/100 *100= 1%)
'Trade FX Trading - Please simplify because I am Beginner'
(Simplify - your equity is $1,000 after leverage you now control $100,000 - $1,000 is what percentage of $100,000 - it is 1 %) that's your margin requirement for your trading account.
The margin examples on MT4 Software below, the set leverage ratio option is 100:1, the margin which is 1 percent is $2683.07, therefore the total amount controlled by the trader is: $268,307 - this is because with this leverage the trader has used little of his money & borrowed the rest of the amount, with this set at 100:1 ratio option, the trader is using 1 percent of their account capital, this 1 percent equals to $2683.07, if 1 percent is equal to $2683.07 then 100 Percent is equivalent to $268,307
MT4 Gold Margin Calculator - MT4 margin level percentage calculator Example
Now if Your Leverage is 100:1
When trading if you have $1,000 dollars & use option 100:1 and buy 1 Mini lot for $10,000 your margin on this transaction is $1000 dollars in your xauusd Mini account, this margin is the money that you will lose if your open trade goes against you - the other $99,000 that's borrowed, the broker will close the open xauusd trades automatically once your $1,000 has been taken out by market.
But this is if your online broker has set 0 % Margin Requirements before liquidating your trades automatically.
For 20 % margin requirement before liquidating your trade transactions automatically, then your trades will be stopped out once your account balance gets to $200
For 50 percent margin requirement of this level before liquidating your trade transactions automatically, then your trade transactions will be stopped out once your account balance gets to $500
If your broker sets 100% margin percent level requirement level before automatically closing your open trade positions, then your trades will be closed out automatically once your trading account balance gets down to $1,000 - Meaning the trade will be closed out as soon as you the trader executes it because even if you pay 1 pip spread your trading account balance will drop to $990 & the needed percentage is 100 percent i.e. $1,000 dollars, therefore your trade orders will immediately get closed out.
Most brokers do not set 100 % requirement, but there are those brokers who set 100 % aren't suitable for you at all, choose those set 50 % or 20% margin requirements, in fact, those brokers that set their margin requirement at 20% are some of the best because the likely-hood they close-out your trade position is reduced as shown in examples above.
MT4 Margin Level Percentage Calculator
In the above MT4 xauusd screen-shot example, the trader is using $2683.07, total controlled sum is $268,307, but account equity is $16,116.55, therefore used leverage is ($268,307 divide by 16,116.55) = 16.64 : 1
16.64 : 1 Used Leverage
The Margin is 600% which is 580% above the required 20% Margin requirement by the broker.
To know about this margin level which is calculated by your MT4 automatically - the MetaTrader 4 Software will show this as "XAUUSD Margin Requirements", This will be portrayed as a percentage the higher the percentage the less likely your trades are to get closed.
For Example if - (using a broker that requires 20 % margin requirement)
Using 100:1 gold leverage
If leverage is 100:1 & you transact 10 Mini Lots, equals to $100,000
$100,000 dollars divide by 100:1, used equity is $1000
Calculation:
= Capital Used * Percentage(100)
= $1,000/$1000 * Percentage(100)
XAUUSD Margin Requirement = 100 %
Investor has 80% above required margin level amount
Using 10:1
If leverage is 10:1 and you transact 1 Mini Lot, equals to $10,000
$10,000 dollars divide by 100:1, used equity is $100
Calculation:
= Capital Used * Percentage(100)
= $1,000/$100 * Percentage(100)
XAUUSD Margin Requirement = 1000 percent
Investor has 980% above required margin level amount
Using 1:1 gold leverage
If leverage is 1:1 & you transact 0.1 Mini Lot, equals to $1,000
$1,000 dollars divide by 100:1, used equity is $10
Calculation:
= Capital Used * Percentage(100)
= $1,000/$10 * Percent(100)
XAUUSD Margin Requirement = 10,000%
Investor has 9800% above required margin level amount
