Glossary
Leverage
Leverage lets you control a larger position with a smaller deposit. It magnifies both gains and losses, which is why regulators cap it for retail traders.
Leverage lets you control a position worth far more than the cash you put up. At 1:100 leverage, $1,000 of margin controls a $100,000 position. The catch: leverage magnifies losses exactly as much as gains.
Because of that risk, regulators cap retail leverage — commonly around 1:30 on major pairs in the EU, UK, and Australia, and 1:20 in Singapore. Higher leverage is not free money; it’s more risk, and most retail traders lose money.
See how leverage affects the deposit a trade ties up with our margin calculator.
Related terms
Back to the full MT4 & forex glossary. Trading is high-risk — see our risk warning.