Forex Leverage is defined as the use of borrowed capital, such as “margin” allowing the Forex trader to gain access to larger sums of capital. This can heighten profits and losses and should be used wisely.
Here is an example of how leverage works in Forex trading:
Forex Trader A has $5,000 USD:
If Forex Trader A has an account leverage of 10:1 and they wish to use $1,000 on one Forex trade as margin, they will have exposure of $10,000 in base currency ($1,000) = 10 x $1000 = $10,000 (trade value).
Forex Trader B has $5,000 USD:
If Forex Trader B has an account leverage of 100:1 and they wish to use $1,000 on one Forex trade as margin, they will have exposure of $100,000 in base currency ($1,000) = 100 x $1,000 = $100,000 (trade value).
The maximum Forex leverage DB Markets may offer is up to 500:1. If you wish to get access to alter your Forex leverage, please note this on the application or contact us. By submitting a change in trade leverage request, you accept that this can result in high risk and severe or total account loss. DB Markets is a non-advisory Forex broker and will not provide you with investment or personal trading advice. For such advice, please consult a registered financial advisor.
Margin Forex is very high risk and leverage should be used wisely.