Trade Forex Trading

Maximum Leverage vs Used Leverage - Difference Between Maximum and Usd Leverage

You should note that there is a difference between maximum leverage ( leverage given by your broker which is the highest xauusd leverage you as a trader can trade with if you select to) & used leverage ( leverage based on the lots you have opened/open trades). One is the broker's (Max) & the other is trader's (Used). To explain this particular concept we will use xauusd above example:

If your broker has given you 100:1 Max xauusd leverage, but you only open lots of $100,000 then Used xauusd leverage is:

100,000 : $10,000 (your money)

10:1 Used Leverage Ratio

You have used 10:1 leverage, but your maximum leverage is still 100:1. This means that even if you're given 100:1 Max leverage or 200:1 Max xauusd leverage, you do not have to use all of it. It's best to keep your used leverage to a maximum of 10:1 but you'll still choose and select 100:1 max leverage ratio for your trading account. The extra leverage will give you as a gold trader what we call Free Margin, As long as you have Free margin on your account then your trade transactions won't get stopped out by your xauusd broker because the margin requirement will remain above the required level.

In trading one of your guidelines: equity management rules on your gold plan should be to use leverage below 5:1.

XAUUSD Leverage Example

The example illustrated below, the set leverage option is 100:1, margin which is 1 percent is $2683.07 dollars, therefore the overall total amount controlled by the trader is: $268,307 - this is because with this leverage the trader has used little of his money and borrowed the rest of the amount, with this set at 100:1 ratio option, the online trader is using 1 % of their trading account capital, this 1 percentage equals to $2683.07, if 1 percent is equivalent to $2683.07 dollars then 100 % is equal to $268,307

Gold What is the Difference Between Maximum Leverage & Used Leverage?

MetaTrader 4 Platform - What's the Difference Between Maximum Leverage & Leverage Used in Gold Trading?

In the above screen shot example, the trader is using $2683.07 dollars, total controlled amount is $268,307, but account equity is $16,116.55, therefore used leverage is ($268,307 dollars divided by 16,116.55) = 16.64 : 1

16.64 : 1

In the account above even though maximum leverage set leverage is 100:1, Used xauusd leverage is 16.64 : 1

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