WHAT IS LEVERAGE? HOW DOES IT WORK? WHY IS LESS MONEY REQUIRED FOR A HIGHER LEVERAGE AND THE RISK IS HIGHER?

Leverage is the use of borrowed funds to increase one’s trading position beyond what would be available from their cash balance alone. Leverage however, can amplify both profits as well as losses.

Example:

Your account balance is 100 EUR.

The leverage of your account based on the instrument you wish to trade is 30:1.

For your trading capital this means 30 * 100 EUR = 3,000 EUR to trade (instead of 100 EUR).

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