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What is 1:100 Leverage?

Gold Leverage in gold trading is the ratio of a gold trader's money to that of the borrowed trading capital which has been borrowed from the broker.

For example 1:100 gold leverage means that for each dollar one has in their account they have borrowed 100 from their broker. Hence if one has $100 in their account they will have borrowed using 1:100 leverage & hence after leverage of 1:100 they will have $100*100:1 leverage and this will be equal to $10,000 dollars gold capital.

Gold Leverage is use of borrowed funds in gold trading so as to trade much bigger volumes so as to increase profit potential of trade transactions.

1:100 gold leverage basically means that as a trader you get $100 for every $1 in your account.

1:100 Leverage for $100 Account

In XAUUSD, a small deposit can control a much larger trade this is called Gold Leverage, which gives traders ability to make more profits on opened trades, & at the same time keep risk capital to a minimum.

A trader will transact on borrowed capital, having $100 trader can borrow the rest using a leverage option such as 100:1 - meaning that one borrows 100 dollars for every 1 dollar they have in their trading account, henceforth in total they will control a total of $10,000 dollars without having to deposit all of it - this is how trading leverage works in xauusd.

Gold Leverage is expressed in forms of a ratio, for Examples 1:100, means the broker with give a trader $100 Dollars for every 1 dollar which the trader has.

Gold Margin is the sum of money required by your broker so as to allow you as a trader to continue trading with trading leveraged amount. Gold Margin is amount you deposit so as to open an account with. If you deposit $100 dollars then that is your xauusd trading margin.

With trading leverage it is possible for retail traders to trade the trading market. Leverage of 100:1 means that for each one dollar you deposit, the online broker will give you $100 dollars. This also means that in converse the online broker requires you to maintain a margin of $1 for every $100 Dollars that they give you so as to let you continue controlling the borrowed amount of capital that they have given you for trading.

XAUUSD Margin Example:

If you deposit $100, & the broker gives you leverage of 100:1 then it means you now have $100*(100) = $10,000 Dollars which you can transact with.

Equity Management Rules for Trading with 1:100 Leverage

When gold trading with 1:100 leverage you should come up with your gold money management rules that you will use to manage your trading account capital. This set of gold equity money management guidelines should be written in your xauusd plan. If you are a beginner trader wanting to open a $100 dollar trading account & you don't know what gold equity management rules are, you can use the learn gold courses below to learn about what is xauusd equity management?

How to create trading money management guidelines for trading a 1:100 Leverage Account

Gold with Trading Leverage

The more leverage you use, the greater the profit/loss

The less leverage you use lesser the profit/loss

It is henceforth better to use less leverage in order to cap the risks involved. The greater the leverage option used the greater the risks. This is one of the trading leverage guide-lines not to use more than 5:1 leverage.

In money management leverage guide-lines: It is advisable to keep below 10:1 leverage which is still high, most professional equity managers use 2:1 leverage in their trading account.

To Learn More about Leverage & Margin - Read the Topics Below:

Gold Leverage & Margin Guide

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