What is The Difference Between Maximum Gold Leverage and Used XAUUSD Leverage?
You should note that there is a difference between maximum xauusd leverage ( xauusd leverage given by your broker which is the highest xauusd leverage you can trade with if you choose to) and used xauusd leverage ( xauusd leverage depending on the lots you have opened/open positions). One is the broker's (Maximum) and the other is trader's (Used). To explain this concept we shall use the xauusd example above:
If your xauusd broker has given you 100:1 Maximum xauusd leverage, but you only open trading lots of 100,000 dollars then Used xauusd leverage is:
100,000 dollars : 10,000 dollars (your money)
10:1 Used XAUUSD Leverage
You have used 10:1 xauusd leverage, but your maximum xauusd leverage is still 100:1. This means that even if you are given 100:1 Maximum xauusd leverage or 200:1 Maximum xauusd leverage , you do not have to use all of it. It is best to keep your used xauusd leverage to a maximum of 10:1 but you will still select 100:1 maximum leverage option for your xauusd account. The extra xauusd leverage will give you what we call Free XAUUSD Margin, As long as you have some Free margin on your trading account then your gold trades will not get closed by your xauusd broker because this margin requirement will remain above the required level.
When it comes to xauusd trading one of your xauusd rules: xauusd money management rules on your xauusd plan should be to use below 5:1.
XAUUSD Leverage Example
The example shown below, the set xauusd leverage is 100:1, the margin which is 1% is $2683.07, therefore the total amount controlled by the xauusd trader is: $268,307 - this is because with this xauusd leverage the xauusd trader has used little of his money and borrowed the rest, with this set at 100:1, the xauusd trader is using 1 % of their capital, this 1% is $2683.07, if 1% is $2683.07 then 100% is $268,307
MetaTrader 4 XAUUSD Platform - What is The Difference Between Maximum Gold Leverage and Used XAUUSD Leverage?
In the above image example, the xauusd trader is using $2683.07, the total controlled amount is $268,307, but account equity is 16,116.55, therefore used xauusd leverage is ($268,307 divide by 16,116.55) = 16.64 : 1
16.64 : 1
In the xauusd trading account above even though the maximum xauusd leverage set xauusd leverage is 100:1, Used xauusd leverage is 16.64 : 1