What is Leverage

What is Leverage in Forex?

Leverage allows traders to control larger positions with smaller capital.

Example

With 1:100 leverage, $100 controls a $10,000 trade.

Benefits of Leverage

  • Increases buying power
  • Allows larger trades
  • Can improve profits

Risks of Leverage

  • Magnifies losses
  • Can liquidate accounts quickly

Related Terms

FAQ

Is high leverage dangerous?
Yes, improper risk management with high leverage can cause major losses.

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