What is Leverage?
Updated October 17, 2026
Leverage lets you control a bigger trade than your deposit by borrowing from your broker.
With 1:100 leverage, $100 in your account can control a $10,000 position. It makes small moves feel big.
That works both ways. Leverage boosts losses exactly as much as it boosts wins, and it's the number one reason beginners blow accounts.
High leverage isn't the problem by itself. The problem is using it to take huge lot sizes. Keep your risk per trade small no matter what leverage says.
Example
At 1:500 you could open a full lot with about $200, but a 20 pip move against you would wipe that out.
Questions people ask
What leverage should a beginner use?
Lower is safer. Many regulators cap retail leverage around 1:30 for a reason.
Does leverage change pip value?
No. Pip value comes from lot size. Leverage only changes how much margin you need.
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