Do You Have to Use Leverage in XAUUSD?
In trading, a trader can trade without leverage by choosing the 1:1 leverage option for their account. XAUUSD leverage of 1:1 means that the trader hasn't borrowed any capital from their broker and the trader only will use the money they have deposited in their margin account for trading.
This option of not leverage is not very popular because leverage is what makes the xauusd popular among online traders - because with leverage xauusd option: for example 1:100 leverage option means a trader can borrow $100 dollars from their broker for each one dollar in their account, therefore one with a deposit of $1,000 can borrow upto $100,000 from their broker - ($1,000*1:100 which is equivalent to $100,000). One can then use this borrowed capital to open trades with.
Also, if there was no leverage then the market would be inaccessible to many traders as they would require a lot of capital before they start xauusd online, but with trading leverage traders can deposit a small amount of capital & use leverage to borrow the rest of funds required to execute a trade from their broker.
Deposit a trader puts in their account is known as the margin. This margin in account is the funds that traders used when borrowing from their broker using leverage. If a trader has a margin of $1,000 in their account they will then use this $1,000 to obtain leverage from their broker and then open trade transactions with capital that is borrowed from their broker.
To Learn and Know More about Leverage & Margin - Read the Topics Below:
Leverage and Margin Explained
