What's Difference Between Maximum Gold Leverage & Used Leverage?

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

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

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

10:1 Used Gold Leverage

You have used 10:1 leverage, but your max 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 don't have to use all of it. It is best to keep your used gold leverage to a maximum of 10:1 but you will still choose 100:1 maximum leverage ratio for your trading account. The extra trading leverage will give you what we call Free Gold Margin, As long as you as a trader have Free margin on your account then your xauusd trades won't get closed by your broker because this margin requirement will remain above the required level.

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

Gold Leverage Example

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

Difference Between Maximum Gold Leverage & Used Gold Leverage

MT4 Platform Software

In the above screenshot image example, the trader is using $2683.07 dollars, total controlled sum is $268,307, but trading equity is $16,116.55 dollars, henceforth used gold leverage is ( $268,307 dollars divide by 16,116.55 ) = 16.64 : 1

16.64 : 1

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

Learn More Lessons and Topics:

Trade Gold Trading

What's Difference Between Maximum Gold Leverage & Used Leverage?

Gold Leverage Example