What Does 100% XAUUSD Margin Requirement Mean in XAUUSD?
Margin requirement is the percentage of the trade transaction value that a trader must maintain so as to continue holding the open trades which have been opened using gold trading leverage.
Example of How Does 100% XAUUSD Margin Requirement Work?
Now if Your Gold Leverage is 100:1
When trading if you have $1,000 & use option 100:1 and buy 1 standard lot for $100,000 your xauusd margin on this trade is the $1000 dollars in your xauusd account, this is the money that you'll lose if your open trade goes against you the other $99,000 that is borrowed from the broker, the broker will close the open xauusd trade transactions automatically 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.
For 20% XAUUSD Margin Requirement before closing your gold trades automatically, then your trade transactions will be closed once your account balance gets to $200
For 50% XAUUSD Margin Requirement of this level before closing your gold trades automatically, then your trades will be closed once your account balance gets to $500
If the broker sets 100% XAUUSD Margin Requirement of this level before closing out your open positions automatically, then your trade will be closed once your balance gets to $1,000: Meaning the xauusd trade will close out as soon as you execute it because even if you pay 1 pips spread your account balance will get to $990 & the needed percentage is 100% i.e. 1,000 dollars, therefore your orders will immediately get closed.
Most xauusd brokers do not set 100% requirement, but there are those xauusd brokers that set 100% XAUUSD Margin Requirement or 50% XAUUSD Margin Requirement aren't suitable for you at all, choose those set 20% margin requirements, in fact, those gold brokers which set their margin requirement at 20% are some of the best because the likely hood they close-out your xauusd trade is reduced as shown in examples above.
To Learn and Know More about Gold Leverage & Margin - Read the Topics Below:
XAUUSD Leverage & Margin Discussed
