Leverage lets you control a large position with a relatively small amount of capital (called margin). It magnifies both gains and losses, which makes it the single most important risk for beginners to understand. A small move against a highly leveraged position can wipe out the entire deposit.
Forex Term
Leverage
Using a small deposit to control a much larger position.
Example
With 1:100 leverage, $1,000 of margin can control a $100,000 position.
Related Terms
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Risk
Forex and CFD trading involves significant risk of loss and is not suitable for all investors. Leverage can work against you. This content is educational and not financial advice — always do your own research.