What is Leverage?
Borrowed capital from your broker that lets you control a position larger than your deposit — amplifying both profits and losses equally.
In-Depth Explanation
Practical Example
"With 30:1 leverage, a 3.33% drop in the asset's price will completely wipe out 100% of your account margin."
Related Terminology
Margin
Margin is the portion of your account balance that the broker "locks away" as collateral to keep your leveraged position open.
Margin Call
A broker's demand that a trader deposit more money to cover potential losses on open positions.
Drawdown
The peak-to-trough decline during a specific period for an investment or trading account.
Pip
A "pip" (percentage in point) is the foundational unit of measurement in forex trading, representing the smallest standard price move in an exchange rate.
Tradeable Instruments Affected
Tactical How-To Guides
How to Start Trading in the UK — Step by Step
Learn how to start trading in the UK. A complete step-by-step guide covering regulation, choosing a broker, and placing your first trade safely.
How to Trade Forex — Beginner's Guide
A complete beginner guide to forex trading. Learn about pips, lots, currency pairs, and how to place your first forex trade.
How to Day Trade — Step by Step
Master the art of day trading. Learn how to manage your time, choose instruments, and execute trades within a single day.
Master the language of risk
Knowing the terms is just the start. Learning how to apply them is where the edge is found.
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