Leverage is a ratio between the amount of guarantee and the trading operation volume.
Sounds difficult, right?
Let’s put it simple!
When trading you trade with lots. A standard lot equals to 100,000 units of a base currency, but it doesn’t mean that you have to invest this huge amount of money by yourself. Your broker can help you. The standard leverage is 1:100. It means that if you want to trade one standard lot of the pair, you have to deposit just $1,000. Your broker will invest the remaining $99,000.
Though this doesn’t mean that you will see 100,000$ on your balance: leverage gives you the possibility to trade with bigger lots, but doesn’t influence your equity.
FBS provides other sizes of the leverage too. You can check the leverages and leverage limits here.
Kindly note: the bigger leverage is, the more risks a trader is likely to encounter.
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