Trade Gold Trading

What's 1:500 Leverage for $100 Dollars Mean?

Trading Leverage in xauusd 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 1:500 gold leverage means that for each one dollar a trader has in their account they have borrowed 500 from their broker. Hence if a trader has $100 in their account they will have borrowed using 1:500 leverage and hence after leverage of 1:500 they will have $100*1:500 leverage and this will be equal to $50000 dollars gold capital.

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

1:500 gold leverage basically means that as a trader you get $500 for every $1 in your account.

1:500 Leverage for $100 Trading Account

In XAUUSD, a small deposit balance can control a much bigger trade this is called Leverage, which gives the online traders the ability to earn more profits on opened trade transactions, & at the same time keep risk capital to a minimum.

One will transact on borrowed capital, having $100 trader can borrow the rest using a leverage option such as 1:500 - meaning that one borrows $500 dollars for every 1 dollar they have in their trading account, henceforth in total they will control a total of $50000 dollars without having to deposit all of it - this is how trading leverage works in xauusd.

Leverage is expressed in forms of a ratio, for Examples 1:500, means the broker with give a trader $500 Dollars for every 1 dollar which the trader has.

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

With trading leverage it's possible for retail traders to trade the trading market. Trading Leverage of 1:500 means that for every dollar you deposit, the broker will give you $500 dollars. This also means that in converse the broker requires you to maintain a margin of $1 Dollar for every $500 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, and the broker gives you leverage of 1:500 then it means now you have $100*(1:500) = $50000 Dollars which you can transact with.

Equity Management Rules for Trading with 1:500 Leverage

When gold trading with 1:500 gold leverage you should create your trading equity management guidelines that you'll use to manage your account capital. This set of trading equity management rules should be written in your plan. If you're a beginner trader wanting to open a $100 dollar account and you do not know what gold equity management guidelines are, you can use the learn gold courses below to learn about what's trading equity management?

How Do I develop trading money management guidelines for trading a 1:500 Leverage Trading Account.

Gold with Leverage

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

The less leverage you use lesser the profit/loss

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

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

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

Leverage and Margin Tutorial

Get More Courses & Lessons:

Forex Traders Seminar Gala

Forex Traders Seminar

Gold Broker