Hi there 
I have a question - so i want to trade gold, and i have found a broker which offer 1:500 leverage - my account will be on 1000$
i was wondering, do i get “more money” in my account with higher leveage? or does it stay the same? cause when i played a bit around with leverage and lots i saw that with higher leverage the profit AND loss got higher, how come?
from 1:1000 my made up tp was 1600, but with 1:300 it was “only” 300-400$
Liiike if i open a buy (1.0 lot) on Xauusd at 1322.91 and it goes against me all the way to 1314.07
what will happen to an Account with 1:500 with 1000$?
What will happen to an account with 1:1000 with 1000$?
Will some of them get stopped out?
Hi @Stenberg98,
It’s important to differentiate between your effective leverage and the maximum leverage available to you.
Your effective leverage is the ratio between the notional value of all your open trades and the amount of money in your trading account.
The maximum leverage available to you is inversely proportional to your minimum margin requirement. For example, if the maximum leverage available to you is 500:1, then your minimum margin requirement is 0.20%, since 0.20% times 500 equals 100%.
For comparison, US regulators set the minimum margin requirement for trading major currency pairs at 2.00% which allows US traders a maximum leverage of 50:1. In other words, the higher the minimum margin requirement, the lower the maximum leverage available to traders.
While regulators and brokers determine the maximum leverage available to traders, it is you as an individual trader who has the power to determine your effective leverage. Furthermore, as has been discussed much lately on the forum, studies suggest there is generally a negative correlation between the effective leverage used by traders and their profitability.
That said, it’s important to understand that the risk you personally choose to take on as a trader based on your effective leverage is not your only risk when trading forex or futures for that matter. In markets like these, where traders use leverage, you must consider the financial responsibility demonstrated by your broker.
Minimum margin requirements should be set by regulators and brokers (and in the case of futures by exchanges as well) by taking into account the perceived risk of a given currency pair. That’s why you will sometimes see them raise margin requirements due to heightened risk from geopolitical concerns.
Is it wise to trust your money with a broker that offers 500:1 leverage to attract customers with no regard for the potential risk to the firm or its clients? The danger to you, if such a broker has not required adequate margin from its clients for the risk they take on in the market, is that your own money can be at greater risk due the losses incurred by other traders and your broker.
“Only when the tide goes out do you discover who’s been swimming naked.” - Warren Buffett
any kinds of leverage ratio can bring good result if there is accurate plan with great risk managing plan.
See my post above about differentiating effective leverage and maximum leverage.
When you say an account has 1:500 leverage or 1:1000 leverage, you are referring to the maximum leverage available to you. Your maximum leverage does not determine your profit or loss on a particular trade. (However, the maximum leverage your broker offers affects their risk, and as a result, the risk to the money you have deposited with them.)
What impacts your profit or loss on a particular trade is your trade size. Furthermore, the ratio between you trade size and the amount of money in your account determines your effective leverage, which we discussed in our previous post.
In either case, if you buy 1.00 lot of XAU/USD which we assume to mean 1 troy ounce of gold, then you will make 1 cent for every cent the price rises, and lose 1 cent for every cent the price falls.
If your trade size is 1 troy ounce then the notional value is just over $1300 in your example, so your effective leverage would be just over 1.3:1 or 1.3 to 1, since you are controlling just over $1300 in the market with $1000 in your account.
Ahh okay, so no matter what you leverage is then the profit will be the same (if you buy the same troy/lot)
So accuactly for a 1000$ it would´t be so smart to open a 1 lot trade, instead a 0,25 should be open, so you wont get stopped out?
We cannot give you financial advice on how much leverage is appropriate for you. However, as we mentioned above, trading 1 troy ounce with $1000 in your account is just over 1.3 to 1 leverage. The price of gold would have to drop from $1322.91 down to $322.91 in order for your $1000 account to fall to zero.
The other risk to consider is the risk your broker could be taking on by offering traders 500:1 leverage or 1000:1 leverage. Other clients of such a broker may use leverage more aggressively than you. See this earlier discussion about the risk of account balances going negative. Can I lose more than my deposit?
Oh i thought i understod it 
Soooo with a 1000$ account with leverage 1:500 - i open a position at 1322.91 (1 troy - 1$ pr point) - i would easyly have been able to hold it even though it went to 1314.07?