What's Difference Between Maximum Gold Leverage & Used Trading Leverage?

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

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

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

10:1 Used Gold Leverage

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

When it comes to trading xauusd trading one of your gold trading rules: gold money management guide-lines on your gold trading plan should be to use below 5:1.

Gold Leverage Example

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

Meta Trader 4 Trading Software

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 gold leverage is ( $268,307 divide by 16,116.55 ) = 16.64 : 1

16.64 : 1

In the trading account above even though the max gold trading leverage set xauusd trade leverage is 100:1, Used gold leverage is 16.64 : 1