Trade Forex Trading

Example of How Does 20 % Margin Requirements Work?

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 20 % 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 account, this is the money that you'll lose if your open trade position moves against you : the other $99,000 dollars that's borrowed from the broker, the broker will close out the open trade transactions mechanically/automatically once your $1,000 has been taken out by the market.

But this is if your broker has set 0% Margin Requirements before closing out your trade positions mechanically.

For 20% Margin Requirements before closing out your transactions mechanically, then your trades will be stopped out once your trading account balance reaches $200

Xauusd brokers will set this level for a trader's account, choose those online brokers that set 20 percent margin requirements, in fact, those brokers that set at 20% margin requirement are the best because the likelihood they close out your trade is reduced and minimized just as is shown in illustrations above.

Some brokers will set these zones at for 50% Margin Requirements before closing out your trade positions mechanically, meaning that your transactions will be closed once your balance gets to $500.

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

Leverage and Margin Discussed

More Tutorials and Topics:

Forex Market Traders Seminar Gala

Forex Market Traders Seminar

XAUUSD Broker