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What's 1:400 Leverage for $100 Dollars Mean?

Leverage in xauusd is the ratio of a gold trader's money to that of the borrowed trading capital which has been borrowed from the online broker.

For example 1:400 leverage means that for every one dollar one has in their account they have borrowed 400 from their broker. Hence if one has $100 in their account they will have borrowed using 1:400 leverage & therefore after using leverage of 1:400 they'll have $100*1:400 leverage and this will be equivalent to $40000 dollars capital.

Leverage is the use of borrowed funds in xauusd to trade much larger and bigger volumes so as to maximize profit potential of trades.

1:400 leverage basically means that as a trader you get $400 for every $1 in your account.

1:400 Leverage for $100 Dollars Account

In XAU USD, a small deposit can control a much larger trade this is referred to as Leverage, which gives and provides traders ability to earn more profits on opened trade positions, and at same time keep the risk capital to a minimum.

A trader will trade on borrowed capital, having $100 trader can borrow the rest oof--thee--amoount using a leverage option like 1:400 - meaning that one borrows $400 for every 1 dollar they have in their trading account, therefore in total they will control a total of $40000 dollars without having to deposit all of it - this is how leverage works in xauusd.

Leverage is denoted in the form of a ratio, for Example 1:400, means the broker with give a trader $400 Dollars for every dollar that the trader has.

Gold Margin is the sum of money required by your broker to allow you the trader to continue trading with the leveraged amount. XAU USD Margin is the amount you deposit so that to open a account with. If you deposit $100 then that is your xauusd/gold margin.

With leverage it's possible for retail traders to trade the markets. Leverage of 1:400 means that for each $1 dollar that you deposit, the broker will give you $400 dollars. This also means that in converse the broker requires you to maintain a margin of $1 Dollar for every $400 that they give you so as to let you continue controlling and using the borrowed amount which they have given you for trading.

XAU/USD Margin Example:

If you deposit $100, and the online broker gives you leverage of 1:400 then it means you now have $100*(1:400) = $40000 Dollars that you as a gold trader can now trade with.

Gold Money Management Guidelines for Trading with 1:400 Leverage

When trading xauusd with 1:400 leverage you should develop your xauusd money management rules that you will use to manage your account capital. This set of gold money management principles should be written on your xauusd/gold plan. If you are a novice trader wanting to open a $100 dollar trading account and you don't know what xauusd money management guidelines are, you as a Gold trader can use the learn xauusd lessons below to learn about what's xauusd funds management?

How Do I come up with gold money management rules for trading a 1:400 Leverage Account.

with Gold Leverage

The more leverage you use the greater the profit/loss

The less leverage which you use the lesser the profit/loss

It is hence better to use less leverage to minimize risks involved. The greater the leverage ratio used the greater the risks. This is one of leverage rules not to trade with more than 5:1 leverage ratio.

In trading leverage guidelines: It's recommended to stay below 10:1 which is also still high, most professional funds managers use 2:1 leverage ratio in their account.

To Learn and Know More about Leverage and Margin - Learn the Tutorials Below:

XAUUSD Leverage and Margin Discussed

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Forex Market Traders Seminar Gala

Forex Market Traders Seminar

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