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Leverage Definition in Trading XAUUSD

Leverage Meaning in XAUUSD

Best xauusd leverage to use is 100:1 leverage ratio. This is the leverage ratio in gold that's also used by professional traders.

For $100 Account Equity

With 1:100 leverage ratio when you open an account with $100 you will have capital of $10,000 to open trade positions with - with 1:100 leverage it means your broker gives and provides you $100 for every one dollar which you have in your account. Hence, if you have $100 - 100*1:100 Leverage is equal to 10,000 that you as a trader can transact with.

In XAU/USD with $100 you as a trader can control $10,000 capital to trade with after using leverage option of 1:100

For $500 Account Equity

With 1:100 leverage ratio when you open a account with $500 you'll have capital of $50,000 dollars to open trade positions with - with 1:100 leverage it means that your broker gives and provides you $100 for every one dollar which you have in your account. Hence, if you have 500 - 500*1:100 Leverage is equivalent to 50,000 which you as a trader can trade with.

In XAUUSD with $500 you as a trader can control $50,000 capital to trade with after using leverage option of 1:100

For $1,000 Account Equity

With 1:100 leverage when you open a trading account with $1,000 you will have capital of $100,000 to open trade positions with - with 1:100 leverage ratio option it means your broker gives and provides you $100 for every one dollar which you have in your account. Hence, if you as a trader have $1,000 - 1,000*1:100 Leverage is equal to 100,000 that you as a trader can transact with.

In XAUUSD with $500 you as a trader can control $100,000 dollars capital to transact with after using leverage option of 1:100

What is the Best Leverage to use when xauusd trading? - 100:1 Leverage ratio

For $2000 Dollars Trade Account Equity

With 1:100 leverage when you open an account with $2000 you will have capital of $200,000 to open trade positions with - with 1:100 leverage ratio option it means that your broker gives and provides you $100 for every one dollar which you have in your account. Hence, if you've 2000 dollars - 2000*1:100 Leverage is equivalent to 200,000 which you as a trader can trade with.

In XAUUSD with $2000 dollars you as a trader can control $200,000 capital to trade with after using leverage option of 1:100

Limitations of Leverage - Leverage Ratio - Leverage Meaning in XAUUSD

The more the leverage you use greater the profit or loss

The less leverage you as a gold trader use, the lesser the profit/loss

It is thence better to use less leverage so as to cap the risks involved. The higher the leverage option used higher the risk. This is one of leverage guide-lines not to use more than 5:1 leverage ratio.

In XAUUSD money management guide-lines: It's always advisable to stay below 10:1 leverage ratio option which is still high, most professional traders use 2:1 leverage ratio meaning they trade only 2 percent of their Account.

To Learn & Know More about Leverage and Margin - Study the Learn XAU/USD Below:

Gold Leverage & Margin Explained with Example

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Forex Market Traders Seminar

XAUUSD Broker