What Is Leverage?
Leverage allows you to control a large position with a small amount of capital. A 100:1 leverage means you can control $100,000 with just $1,000 in your account.
Margin Requirements
To open a leveraged position, your broker requires a margin deposit. If the trade moves against you and your account equity falls below the margin level, you receive a margin call.
Risk Management With Leverage
Always use stop-loss orders when trading with leverage. Risk no more than 1-2% of your account per trade. Higher leverage is not always better.
Leverage Regulations
Regulations vary by region. In the EU, retail traders are limited to 30:1 for major currency pairs. In other regions, leverage can go up to 500:1.