Trade Forex Trading

How to Calculate Margin Level

What's Margin Trade Account? - XAUUSD Gold Margin Level Percent Calculation - XAUUSD Gold Margin Calculator

The meaning of XAU/USD 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 a lot traders.

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

Example:

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

This means you borrow $100 dollars for each $1 you have on your account.

To put in another way your online broker gives you $100 dollars for each one dollar in your account. This is what is known & referred to as leverage.

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

If for $1 dollar the broker gives you 100

Then if you have 1,000 you'll 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 dollars, or $5,000 dollars trading account? - The best leverage option to select when opening a real account is 100:1 & not 400:1.

What's Margin?

This is the sum of money required by your broker so that to allow you the trader to continue to transact with borrowed amount.

In other words the question what's margin in XAUUSD? can be elaborated as money required to cover open trades & is denoted in percentage. For 100:1, the amount you'll control is $100,000 as expounded in the above exemplification.

Now can you as trader compare a trader/investor investing with $1,000 with another one that is investing with $100,000? Obviously You Can't. This is how it works: it moves you as a trader from that retail trader investing with $1,000 to the investing with $100,000. Where does this extra money come from? - You borrow it from your online trading broker in what is simply known & 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 and borrowing the rest. Otherwise, if you were to open trades without this leverage it would not be as profitable as it is, in fact you as a gold trader 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 trading profit.

Example of how to calculate leverage & gold margin:

Margin required in this instance is $1,000 dollars (your capital) if it's denoted as a % of $100,000 which you control it is:

If leverage = 100:1

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

Margin required = 1 %

(1/100 *100= 1%)

'Trade FX Trading - Please simplify a little bit because I am a Beginner Trader Trader'

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

Study More Tutorials & Topics:

Forex Market Traders Seminar Gala

Forex Market Traders Seminar

XAUUSD Broker