How to Calculate Margin Level

What's Margin Account? - XAUUSD Margin Level Percentage Calculator - XAUUSD Margin Calculator

The meaning of XAUUSD Leverage is having the ability to control a large amount of money using very little of your own money and borrowing the rest - this is what makes the market to attract many investors.

We shall explain leverage first & then explain margin in this learning how to calculate leverage & xauusd margin tutorial.

Example:

We shall use this example to explain what leverage is? If your broker gives you leverage ratio of 100:1 (this the best option to choose as the maximum for any account)

This means you borrow $100 for each 1 dollar you have in your account.

To put in another way your broker gives you $100 for each one dollar in your trading account. This is what's referred to as leverage.

This means if you open an account with $1,000 and your leverage ratio option is 100:1, then you get $100 for every $1 you that you have in your account, the total amount that you will control is:

If for 1 dollar the broker gives you 100

Then if you have 1,000 you will get a total of:

$1,000 * 100 = $100,000

Now you control $100,000 of Investment

Most new traders ask what leverage is best leverage for $1,000, or $2,000, or $5,000 account? - The best leverage option to select when opening a real account is 100:1 and not 400:1.

What's Margin?

This is the sum of money required by your broker so as to allow you to continue to trade with borrowed amount.

In other words the question what's margin in XAUUSD? can be described as money required to cover open trades and is expressed in percent. For 100:1, the amount you will control is $100,000 as explained in the above example.

Now can you compare a investing $1,000 with another one that is investing $100,000? Obviously Not. This is how it works: it takes you as a trader from that retail trader investing $1,000 to the investing $100,000. Where does this extra money come from? - You borrow it from your online broker in what's simply referred to as Gold Leverage. This equity which you borrow, you borrow it against the $1,000 of your equity which you deposit with your online broker. If you were to explain what this leverage means - then it is the ability to control a large amount of money using very little of your own money ##1and borrowing the rest. Otherwise, if you were trade without this leverage it would not be as profitable as it is, in fact you can still select not to use leverage, using 1:1 trading leverage option but you would not make money and it would take too long to make any profit.

Example of how to calculate leverage & gold margin:

Margin required in this case is $1,000 dollars (your money) if it is expressed as a percentage of $100,000 dollars which you control it is:

If leverage = 100:1

1,000 / 100,000 * 100= 1%

Margin required = 1%

(1/100 *100= 1%)

'Trade Forex Trading - Please simplify because I am Beginner Trader'

(Simplify - your equity is $1,000 after leverage you control $100,000 - $1,000 is what percent of $100,000 - it is 1 %) that's your margin requirement for your trading account.