Newbie: Margin calculation and margin call question


9 0
Can anyone please explain the following:
Suppose I have a starter account and I have USD300 in my account. I change my leverage to 1:10. Now if I buy/sell 0.01 (on MT4) lot of XAU/USD, how much margin will be used? When will a margin call occur?


Junior member
21 0
If for example the gold price is $1,350.00 then the position value at open will be 0.01 lots * 100 oz * $1,350.00 = $1,350.00. With a leverage of 1:10 the initial margin will be $1,350.00 / 10 = $135.00.

Assuming that a margin call is triggered at a margin level of 20% (depends on the broker) you can sustain a price movement of $273. (20% of $135.00 = $27.00 - meaning when your equity drops below that amount the broker will close the trade.)
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock