How leverage works?

HEllo everyone,

It appear that it's very dangerous to abuse leverage, but how to really master it? how to understand it and how to calculate it? if someone can help thanks.

Pradeep Narayan

Well-Known Member
The most simplest way to understand it is to view all trades in terms of actual contract value and not in terms of margin. When you put in an order worth 10 Lakhs, it is just that - a 10L order. And if you make 10000 out of that, your gain is 1%.
Leverage is given by the broker. For example, when using a leverage of 1: 1000 and a deposit of $ 100, you can open deals for $ 100,000.
Leverage is a fundamental analysis used by traders to earn more profit out of some capital investment. It can occur loss also if not done with proper knowledge of it.


New Member
I prefer to choose a large leverage that gives me the opportunity not to invest large amounts from my own pocket.

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