Forex leverage allows traders to control a larger position in the forex market with a relatively small amount of capital. Essentially, it’s a loan provided by brokers to enable traders to amplify their trading potential. For instance, with a leverage ratio of 100:1, you can control a $100,000 position with just $1,000 of your own money.

While leverage can magnify profits, it also increases the risk of substantial losses. Therefore, it’s crucial to use leverage cautiously and implement risk management strategies, such as stop-loss orders, to protect your capital.

Have you ever considered trading in the forex market?