Understanding Leverage and Margin

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Leverage amplifies everything

1:100 lets $1,000 control $100,000. Gains and losses both scale by the same factor.

Margin is the deposit

Required margin = notional ÷ leverage. Use ourmargin calculatorto see it.

Margin calls and stop-outs

If losses eat your free margin, the broker may close positions automatically.

Use leverage defensively

Smaller leverage gives you room to survive normal swings. High leverage is for experienced, well-capitalized traders only.

Educational content only. Forex trading carries substantial risk; this is not financial advice.

RISK WARNING: Trading in foreign exchanges carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of some or all of your deposited funds; therefore, you should not speculate with capital that you cannot afford to lose.

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Risk Disclaimer: TopForexBrokersComparison.com will not be held liable for any loss or damage resulting from reliance on the information contained within this website including market news, analysis, trading signals and Forex broker reviews. The data contained in this website is not necessarily real-time nor accurate, and analyses are the opinions of the author and do not represent the recommendations of TopForexBrokersComparison.com or its employees. Currency trading on margin involves high risk, and is not suitable for all investors. As a leveraged product losses are able to exceed initial deposits and capital is at risk. Before deciding to trade Forex or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite. We work hard to offer you valuable information about all of the brokers that we review. In order to provide you with this free service we receive advertising fees from brokers, including some of those listed within our rankings and on this page. While we do our utmost to ensure that all our data is up-to-date, we encourage you to verify our information with the broker directly.

Regional Notice: Leverage limits and investor protections vary by jurisdiction (ESMA/EU, ASIC/AU, FCA/UK). Confirm the applicable rules with your local regulator.