What is The Difference Between Maximum Oil Trading Leverage and Used Trading Leverage?

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

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

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

10:1 Used Trading Leverage

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

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

Trading Leverage Example

The example shown below, the set trading leverage is 100 : 1, the margin which is 1 % is $2683.07, therefore the total sum 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% is equivalent to $2683.07, if 1 % is equal to $2683.07 then 100 % is $268,307

MT4 Oil Software - What is The Difference Between Maximum Oil Trading Leverage and Used Trading Leverage?

In the above image example, the trader is using $2683.07, total controlled amount is $268,307, but trading account equity is 16,116.55, therefore used leverage is ($268,307 divide by 16,116.55) = 16.64 : 1

16.64 : 1

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