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 can trade with if you select to) & used leverage ( leverage based on the lots you have opened/open trades). One is the broker's (Maximum) and 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 dollars (your money)

10:1 Used Leverage

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

In trading one of your guidelines: equity management rules on your xauusd 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 total amount controlled by 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 trader is using 1 percent% 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?

MT4 Platform - What's the Difference Between Maximum Leverage and 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 trading account equity is $16,116.55, therefore used leverage is ($268,307 dollars divide 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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