Leverage lets you control a larger position than your own money alone would allow. With 1:30 leverage, 1,000 in margin can control a position worth 30,000.
It works both ways
A 1% move in your favour on a 30,000 position is 300. A 1% move against you is a loss of 300, which is 30% of the 1,000 you put in. Leverage makes small moves matter much more.
Margin and margin calls
Margin is the money held to keep a position open. If losses shrink your equity too far, the platform can close positions automatically. This is called a stop-out.
Simple rules
- Use less leverage than the maximum.
- Always know how much you can lose on one trade.
- Leverage limits differ by country. They exist to protect you.