Leverage in Forex trading allows traders to control a larger position with a smaller amount of capital. It is expressed as a ratio, such as 1:50, 1:100, or 1:500. For instance, if your broker offers 1:100 leverage, you can control a $10,000 position with just $100 of your own money.
While leverage amplifies potential profits, it also increases risk. A small adverse price movement can result in significant losses, potentially exceeding your initial deposit. This is why using leverage responsibly and implementing risk management strategies is crucial.
While leverage amplifies potential profits, it also increases risk. A small adverse price movement can result in significant losses, potentially exceeding your initial deposit. This is why using leverage responsibly and implementing risk management strategies is crucial.