Start simple: a deposit that borrows the rest
Leverage lets you control a big position with a small deposit. That deposit is your margin. Gains and losses scale equally—so the only winning play is disciplined position sizing.
Common caps (and what “pro” really means)
Retail leverage on major FX is typically ~1:30 in EU/UK/AU-style regimes. “Professional” status can raise limits (e.g., 1:200–1:400) but may remove safety nets such as negative balance protection and can tighten margin policy. Don’t upgrade unless your plan requires it.
What your platform is quietly tracking
- Used margin — deposit locked by open trades.
- Free margin — buffer remaining; your oxygen.
- Margin level — equity ÷ used margin × 100%. Lower = closer to forced closures.
The blunt rule that saves more traders than anything
Risk a small, fixed slice per idea—commonly 0.5–1% of equity. Small cuts heal; big cuts don’t.
Position sizing in one line
Money at risk = pip value per lot × stop (pips) × lots. Pick money at risk first (e.g., 1% of equity), then solve for lots. If the lot size looks tiny, the move is too wide for the account—choose a tighter trade or wait.
Retail examples
| Scenario | Setup | Outcome |
|---|---|---|
| Conservative | $5k, 1:30, risk 1% ($50), 25-pip stop | Stop hit ≈ −$50. Ten losers = annoying, not fatal. |
| Over-sized | $1k, 1:30, large lot “to make it back” | Small move drains free margin; a bigger candle triggers stop-out. |
| “Pro” leverage | $10k, 1:200, no plan | Works until it doesn’t; the system closes for you. |
Fine print you actually need
- Margin call level (50%? 80%?).
- Stop-out rule (worst-first or per-position?).
- Event rules (higher margin before news/weekends?).
- Negative balance protection (explicit or waived for “pro”?).
Three guards that keep you sane
- Hard-cap risk per trade.
- Use a stop you’ll actually keep.
- Limit concurrent trades—correlated risk acts like one big bet.
Mini calculator (quick estimate)
Rough guide only — pip values vary by pair & quote currency.
Pin this above your desk
Leverage is a microphone. Turn it down until your plan is worth amplifying.
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