What's a Margin Account?
A Gold Margin trading account is an account that allows traders to control a large amount of trade position using little of their own capital while borrowing the rest from their broker.
What is Margin Account?
Obtaining this margin account will enable you as a trader to borrow money from your broker to trade with.
The amount of borrowing power your account provides you what's called " leverage", and is mostly expressed as a ratio - a ratio of 100:1 means you as a trader can control resources that are worth 100 times more than your deposit - leverage 100:1 means you as a trader can borrow 100 dollars from your broker for every $1 dollar on your account.
What this means in Gold terms is that with 1% margin in your trading account you as a trader can control 1 standard lot or 1 contract worth $100,000 with a $1,000 dollars deposit.
However, Trading this account increases both the potential for profits & also losses. In you as a trader can never lose more than you invest, losses are limited to your deposits and generally brokers will close a trade position position which extends beyond your deposit amount by executing a margin call. Traders must therefore try and keep their margin requirement level which is above that which is required. By using equity management rules and keeping your used leverage below 5:1.
To Learn and Know More about Leverage and Margin - Learn the Topics Listed Below:
Gold Leverage & Margin Explained with Example
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