Leverage Calculator Gold Trading
Types of Leverage in XAUUSD Trading
The meaning of gold leverage is having the ability to control a large amount of money using very little of your own money and borrowing the rest - this is what makes the gold market to attract many investors - Gold Leverage Synonym - XAUUSD Gearing.
What does xauusd leverage ratio of 1:100 mean?
When Trading Gold using leverage it means that as a gold trader you can open trades that are larger than if you were using only the amount of money in your trading account without xauusd trading leverage.
With gold leverage you can use your money that is in your xauusd trading account to borrow from your online gold broker through what is known as gold leverage. For example if you have a gold trading account with $100 dollars - you can use your $100 and borrow using the gold leverage of 1:100, which means that you will borrow $100 from your gold broker for every $1 in your xauusd trading account and after leverage you will have $100*(1:100 XAUUSD Leverage Ratio) = $10,000.
Gold leverage is written in the form of a ratio:
for example leverage ratio of 1:100 or 1:50 or 1:10
Sometimes the leverage ratio can also be written as 100:1 or 50:1 or 10:1 depending on the gold broker you are trading with.
This leverage ratio just explains the amount of gold leverage whether it is written 100:1 or 1:100.
XAUUSD leverage ratio of 1:100 means you have borrowed using 1:100 and increased your gold trading capital 100 times.
Leverage of 1:50 means you have borrowed using 1:50 and increased your trading capital 50 times.
Leverage of 1:10 means you have borrowed using 1:10 and increased your gold trading capital 10 times.
XAUUSD Leverage Example:
We shall us this xauusd trading example to explain what gold trading leverage is? If your gold broker gives you leverage of 100:1 (this is the best option to choose as the maximum gold leverage for any gold trading account)
This means you borrow 100 dollars for every dollar you have in your xauusd trading account.
To put in another way your gold broker gives you 100 dollars for every 1 dollar in your xauusd trading account. This is what is known as xauusd trading leverage.
This means if you open a gold trading account with $2,000 and your leverage is 100:1, then you get $100 for every $1 you that you have in your trading account, the total amount of trading capital you will control is:
If for 1 dollar the xauusd broker gives you 100
Then if you have 2,000 you will get a total of:
$2,000 * 100 = 200,000 dollars
Now you control 200,000 dollars of capital in your xauusd trading account that you can open xauusd trades with
Most new gold traders ask what gold leverage ratio is best for 1000 dollars, or 5000 dollars, or 10,000 dollars gold trading account? - The best option to choose when opening a live Gold account is always 100:1 and not 500:1.
About Gold Trading Leverage
The more xauusd leverage you use the greater the profit or loss
The less xauusd leverage you use the lesser the profit or loss
It is therefore better to use less gold leverage so as to minimize the risks involved. The higher the gold leverage used the higher the risk. This is one of the gold leverage rules and gold money management guidelines not to trade with more than 5:1 xauusd trading leverage.
In XAUUSD leverage money management guidelines: It is always advisable to use gold leverage ratio below 10:1 which is still high, most professional money managers use gold leverage ratio of 2:1 meaning they trade only 2% of their gold trading account.
To Learn about XAUUSD Leverage and Margin:
Gold Leverage Formula and XAUUSD Margin Formula
