How to Calculate XAUUSD Margin - What is Margin in XAUUSD?

What's Margin XAUUSD Account?

The definition 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 xauusd market to attract many investors.

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

Example:

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

This means you borrow 100 dollars for every dollar you have in your gold trading account.

To put in another way your xauusd broker gives you 100 dollars for every 1 dollar in your account. This is what's referred to as gold trading leverage.

This means if you open an account with $1,000 & your xauusd leverage is 100:1, then you get $100 for every $1 you that you have in your trading account, total amount that you'll 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 dollars

Now you control 100,000 dollars of Investment

Most new xauusd traders ask what xauusd leverage is best xauusd leverage for 1,000 dollars, or 2,000 dollars, or 5,000 dollars xauusd account? - The best xauusd leverage option to select when opening a live gold account is always 100:1 & not 400:1.

What's XAUUSD Trading Margin?

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

In other words the question what is xauusd margin in XAUUSD? can be explained as the money required to cover open gold trades and is expressed in percentage. For 100:1, the amount you'll control is 100,000 dollars as explained in the above example.

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

Example of how to calculate xauusd leverage & xauusd margin:

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

If leveraging = 100:1

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

Margin required = 1%

(1/100 *100= 1%)

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

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

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