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.

Explanation of How Does 100% Margin Requirements Work?

Now if Your Leverage is 100:1

When trading if you have $1,000 & use leverage ratio 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 position moves against you : the other $99,000 dollars that's borrowed from the broker, the online broker will close out the open trades mechanically/automatically once your $1,000 has been taken out by the market.

But this is if your xauusd broker has set 0 percent XAUUSD Gold Margin Requirements before closing out your trade positions mechanically.

For 20% Margin Requirements before closing your open positions mechanically, 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 mechanically, then your trades will be stopped out once your account balance reaches $500

If the online broker sets 100 % Margin Requirement of this level before closing out your open positions mechanically, then your trade 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 % is 100 percent i.e. $1,000, hence your trade orders will immediately be closed.

Most xauusd brokers do not 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 % margin requirements, in fact, those brokers that set their trading margin requirement at 20 % are among the best since due to and because of the likely hood they stop out-out your xauusd trade is reduced and minimized like is illustrated and shown in illustrations above.

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

XAUUSD Leverage and Margin Discussed

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