Leverage is a trading tool that allows you to control a larger market position using a smaller amount of your own capital.

For example, with 1:100 leverage, you can control a position worth $100,000 using approximately $1,000 of margin. This enables traders to gain greater market exposure without needing to commit the full value of the trade.

Leverage is commonly used when trading forex, stocks, indices, commodities and other leveraged financial products through MetaTrader 5 (MT5).

Example of Leverage

If you have:

- Account Balance: $1,000
- Leverage: 1:100

You may be able to open positions with a total value significantly greater than your account balance, subject to available margin and trading conditions.

Important Risk Warning

While leverage can increase potential profits, it can also increase potential losses. Even small market movements can have a significant impact on your account when trading with leverage.

For this reason, traders should carefully manage risk by monitoring margin levels, using Stop Loss orders and selecting a leverage level appropriate for their trading experience and risk tolerance.

Understanding how leverage works is an important part of responsible trading and effective risk management.