How to Calculate Gold Trading Margin

What is Margin XAUUSD Trading Account?

The definition of Gold Leverage is having the ability to control a big 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 gold leverage first & then explain gold margin in this learn how to calculate xauusd leverage and gold trading margin course.

Example:

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

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

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

This means if you open an account with $1,000 and your gold leverage is 100:1, then you get $100 for every $1 you that you've in your account, the total amount that you'll control is:

If for 1 dollar the broker will give you 100

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

$1,000 * 100 = 100,000 dollars

Now you control 100,000 dollars of Investment

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

What is XAUUSD Trading Margin?

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

In other words the question what's gold trading margin in Gold Trading? can be described as money required to cover open xauusd trades and is expressed in percent. For 100:1, the amount you'll control is 100,000 dollars as described in 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 from that retail investing $1,000 to that investing $100,000. Where does this extra cash come from? - You borrow it from your gold broker in what is simply referred to as Gold Leverage. This money that you borrow, you borrow it against the $1,000 dollar of your own money which you deposit with your xauusd trading broker. If you were to explain what this gold leverage means - then it's 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 Gold Trading without this gold leverage it would not be as profitable as it is, in fact you can still select not to use xauusd trading leverage, using 1:1 leverage option but you would not make money and it would take too long to make any profit.

Example of how to calculate xauusd leverage and gold trading 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 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 gold leverage you control $100,000 - $1,000 is what percent of $100,000 - it's 1%) that is your gold trading margin requirement for your xauusd trading account.

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