What is the Difference Between Maximum Gold Leverage & Used XAUUSD Leverage?
You should note that there's a difference between maximum gold trading leverage ( xauusd leverage given by your broker which is the highest xauusd leverage you can trade with if you select to) & used gold trading leverage ( xauusd leverage depending on the lots you have opened/open trades). One is the broker's (Maximum) & the other is trader's (Used). To explain this concept we shall use 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 gold 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'll still select 100:1 maximum leverage option for your trading 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 gold trading broker because this margin requirement will remain above required level.
When it comes to xauusd trading one of your rules: gold money management trading rules on your xauusd plan should be to use below 5:1.
Gold Leverage Example
The example shown below, the set xauusd leverage ratio is 100:1, margin which is 1% is $2683.07, therefore the total amount controlled by xauusd trader is: $268,307 - this is because with this leverage the trader has used little of his money and borrowed the rest, with this set at 100:1, the trader is using 1 % of their capital, this 1% equals to $2683.07, if 1% is equal to $2683.07 then 100% is equal to $268,307
MT4 XAUUSD Platform - What is the Difference Between Maximum Gold Leverage & Used XAUUSD Leverage?
In the above image example, the trader is using $2683.07, total controlled amount is $268,307, but account equity is 16,116.55, therefore used xauusd trading leverage is ($268,307 divide by 16,116.55) = 16.64 : 1
16.64 : 1
In the xauusd trading account above even though maximum xauusd leverage set gold trading leverage is 100:1, Used xauusd leverage is 16.64 : 1
