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

You should note that there's 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 (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 trader what we call Free Margin, As long as you have Free margin on your trading account then your trades won't 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 ratio option is 100:1, margin which is 1 percent is $2683.07, 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 account capital, this 1 percent equals to $2683.07, if 1 percent is equivalent to $2683.07 then 100 Percent is equal to $268,307

MT4 Platform - What's the Difference Between Maximum Leverage and Leverage Used in Gold Trading?

In the above image example, the trader is using $2683.07 dollars, total controlled amount is $268,307 dollars, but account equity is 16,116.55, therefore used leverage is ($268,307 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