What is The Difference Between Maximum Metals Leverage & Used Metal Trading Leverage?

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

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

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

10:1 Used Metals Trading Leverage

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

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

Metals Trading Leverage Example

The example illustrated & described below, the set metal leverage is 100:1, the margin which is 1% is $2683.07, therefore 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, with this set at 100:1, the trader is using 1 % of their capital, this 1% is equivalent to $2683.07, if 1% is equal to $2683.07 then 100% is $268,307

MetaTrader 4 Metals 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 metal leverage is ($268,307 divide by 16,116.55) = 16.64 : 1

16.64 : 1

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