Which Leverage is Best in Gold Trading for Beginners?
Which Leverage is Best for XAUUSD Beginner Traders?
The leverage which is best in gold for beginners is 1:100 xauusd trading leverage. This gold leverage ratio is the most widely used gold leverage ratio in xauusd trading.
The leverage ratio 1:100 means that a trader can borrow up to 100 times the amount that they will have deposited in their gold trading account as capital.
For example if a trader has $2,000 in their xauusd account - then they can borrow up to 100 times this amount using leverage ratio 1:100 - and therefore after using leverage the trader will then have a total of $200,000 with which they can use to trade and to open xauusd trades with.
With leverage 1:100 the trader will not use their leverage when opening a gold trade but the trader will only use part of this leverage to open xauusd trades - this will be known as used leverage.
The used leverage is the leverage that a trader is using at a specific time when trading - this is different from the 1:100 leverage - the 1:100 leverage is known as the maximum leverage. Maximum leverage is the total leverage that is available for a trader to use and a trader can decide to use all of the gold trading leverage when trading gold or only use part of this xauusd trading leverage.
A trader will choose to use part of this gold trading leverage so as to implement better gold money management guidelines in their gold trading account with this leverage.
A trader will choose not to use the entire 1:100 leverage ratio provided so as to have some level of free margin in their xauusd trading account. If a trader has some free margin in their gold trading account it means that their open xauusd trades cannot be closed by a gold margin call. Gold margin call is when a gold trader's open trades are closed automatically by a broker after a trader's free margin falls below the required margin level set by the broker.
Therefore, by only using part of the available gold leverage a trader will ensure that they have enough free margin in their xauusd trading account and this will provide their open xauusd trades some free margin.
To learn more about gold leverage - used leverage & maximum leverage and how these two interact with each other - and how these two are used to calculate free margin level xauusd traders should learn about the information on the gold trading topics below:
Which leverage is best in gold for beginners? - Which leverage is best in beginners? - Which leverage is best for beginners? - How to Choose the Leverage Which is Best for XAUUSD Beginners?
For Example
A trader may have $1,000 in their xauusd account and after gold leverage of 1:100 which is the maximum gold leverage - the trader can open up to $100,000 of xauusd trades but if the trader only opens $20,000 of xauusd trades the trader will only be using 1:20 leverage and this will be the used leverage which is only part of the total maximum leverage which is 1:100 leverage.
To learn more about how to trade gold using leverage and which leverage is best in gold for beginners - traders should also learn about the information about gold money management that will explain to them about gold trading account capital management rules that are commonly used by traders.
Which Leverage is Best for Gold Trading Beginners? - How to Choose the Leverage Which is Best for XAUUSD Beginners?
