Leverage
Leverage lets you control a larger position with a smaller deposit. It amplifies both profit and loss.
Leverage is expressed as a ratio: 1:30, 1:100, 1:500, 1:1000. A ratio of 1:100 means $1,000 of your capital controls $100,000 of market exposure. EU and UK retail clients are capped at 1:30 on major forex pairs under ESMA / FCA rules. Offshore-licensed brokers offer 1:500 to 1:Unlimited. Higher leverage is not a feature, it is a tool that magnifies risk. A 1% adverse move on 1:100 leverage wipes the entire deposit.
Worked example
With 1:500 leverage and $200 deposit you can open a position worth $100,000. A 0.2% adverse move (about 20 pips on EUR/USD) wipes your account.