Trade Forex Trading

What Does 100% Margin Requirement Mean in XAUUSD?

Margin requirement is the percentage of the trade value that a trader must maintain so as to continue holding the open trades which have been opened using leverage.

Example of How Does 100% Margin Requirements Work?

Now if Your Leverage is 100:1

When trading if you have $1,000 & use leverage option 100:1 & buy 1 standard lot for $100,000 your xauusd margin on this trade is the $1000 in your xauusd account, this is the money that you will lose if your open trade goes against you the other $99,000 dollars that's borrowed from the broker, the online broker will close the open trades automatically once your $1,000 has been taken by market.

But this is if your xauusd broker has set 0 percent XAUUSD Margin Requirements before stopping outliquidating your trades automatically.

For 20% Margin Requirements before stopping outliquidating your positions automatically, then your trades will be closed once your account balance gets to $200

For 50% Margin Requirements of this level before stopping out your transactions automatically, then your trades will be stopped out once your trading account balance reaches $500

If the online broker sets 100 % Margin Requirement of this level before closing out your open positions automatically, then your trade transaction will be closed out once your balance gets to $1,000: Meaning the trade will close out as soon as you open it because even if you pay 1 pips spread your trading account balance will get to $990 and the needed percentage% is 100 percent% i.e. $1,000, hence your orders will immediately be closed.

Most xauusd brokers don't set 100% requirement, but there are those xauusd brokers that set 100% Margin Requirement or 50% Margin Requirement aren't suitable for you at all, select those set 20 percentage% margin requirements, in fact, those brokers which set their margin requirement at 20 percent% are some of the best since due to the likely hood they stop out-out your xauusd trade is reduced as illustrated in examples above.

To Learn & Know More about Leverage & Margin - Read the Topics Below:

XAUUSD Leverage & Margin Discussed

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