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.
