What is the Difference Between Maximum Gold Trading Leverage and Used Gold Trading Leverage?

You should note that there is a difference between maximum gold trading leverage ( gold trading leverage given by your broker which is the highest gold leverage you can trade with if you choose to) and used gold trading leverage ( gold trading leverage depending on the lots you have opened/open positions). One is the broker's (Maximum) and the other is trader's (Used). To explain this concept we shall use the xauusd trading example above:

If your gold broker has given you 100:1 Maximum xauusd trading leverage, but you only open trading lots of 100,000 dollars then Used gold trading leverage is:

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

10:1 Used Gold Trading Leverage

You have used 10:1 xauusd trading leverage, but your maximum gold leverage is still 100:1. This means that even if you are given 100:1 Maximum gold trading leverage or 200:1 Maximum gold trading leverage , you do not have to use all of it. It is best to keep your used gold trading leverage to a maximum of 10:1 but you will still select 100:1 maximum leverage option for your gold trading account. The extra gold trading leverage will give you what we call Free Gold Trading Margin, As long as you have some Free margin on your trading account then your xauusd trades will not get closed by your gold broker because this margin requirement will remain above the required level.

When it comes to trading gold one of your gold trading rules: gold trading money management guidelines on your gold trading plan should be to use below 5:1.

XAUUSD Trading Leverage Example

The example illustrated and explained below, the set gold leverage is 100:1, the margin which is 1% is $2683.07, therefore the total amount controlled by the gold trader is: $268,307 - this is because with this gold trading 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% is $2683.07, if 1% is $2683.07 then 100% is $268,307

MT4 Gold Trading Platform

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

16.64 : 1

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