What Happens When Free Gold Margin Hits Zero?
What Happens When Free XAUUSD Margin is Negative?
A gold stop out is when a gold trader's account free gold margin goes below the required gold margin level that is set by the gold broker. This means that because the free gold margin in the gold trader's account has gone below the required gold margin level then the trader gets a gold stop out and some of the open trades in the gold trader's are closed by the gold broker until this gold margin level goes back up to above the required xauusd trading margin level.
Some of the open trades may be closed or all of the open trades may be closed if this gold stop out is automatically executed by the xauusd trading broker.
What is Gold Trading Margin Requirement Level?
Now if Your XAUUSD Leverage is 100:1
When trading if you have $1,000 and use leverage of 100:1 and buy a gold trade - your gold margin on this gold trade transaction is the $1000 dollars in your gold account, this is the money that you will lose is your open gold trade transaction goes against you the other $99,000 that is borrowed, the gold broker will close the open trades automatically using a Gold Stop Out once your $1,000 has been taken by the xauusd trading market.
But this is if your gold broker has set 0% Gold Trading Margin Requirement before closing your xauusd trades automatically using this Gold Stop Out.
What is 20% Gold Trading Margin Requirement Level?
For 20% gold margin requirement before closing your xauusd trades automatically using a Gold Stop Out, then your xauusd trades will be closed once your balance gets to $200 - at $200 you will get a gold stop out.
What is 50% Gold Trading Margin Requirement Level?
For 50% requirement of this level before closing your xauusd trades automatically using a gold stop out, then your trades will be closed once your balance gets to $500 - at $500 you will get a gold stop out.
What is 100% Gold Trading Margin Requirement Level?
If the broker sets 100% gold margin requirement of this level before closing your open positions automatically using a Gold Stop Out - at $1,000 you will get a xauusd trading stop out, then your xauusd trades will be closed once your balance gets to $1,000: Meaning the xauusd trades will close out as soon as you execute a 1 standard gold lot on this xauusd trading account because even if you pay 10 dollars spread your gold trading account balance will get to below $1,000 and the needed gold margin requirement percentage is 100% that is 1,000 dollars, therefore your gold orders will immediately get closed using a Gold Stop Out once your gold margin requirement falls below 100%.
Most gold brokers do not set 100% gold margin requirement, but there are those gold brokers that set 100% gold margin are not suitable for you at all, even those that set 50% gold margin requirement are still not suitable. Choose those set 20% gold margin requirements, in fact, those xauusd brokers that set their margin requirement at 20% Gold Trading Margin Requirement are some of the best because the likely hood they close out your trade using a Gold Stop Out is reduced as shown in the examples above.
To Know More about XAUUSD Leverage and XAUUSD Margin - Read the Learn Gold Topics Below:
XAUUSD Leverage and XAUUSD Margin Explained
