Brokers offer leverage to maximize traders' buying power as they're able to deposit a small amount of funds and trade larger volumes. Leverage is expressed as a ratio, so if it is 1:100 for example, a trader's buying power is magnified 100 times. Leverage provides opportunities for multiplied profits but at the same time, one may have multiplied losses as well.
Leverage essentially enables you to get a larger exposure to the markets than the amount that you've deposited to trade. It's similar to a loan, in that we'll lend you capital to buy even more of an asset. If your trade is successful, your profit will be even bigger. Remember though any losses you experience will be greater too.
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What is the FXTM leverage limit?
FXTM offers floating leverage from 1:25 up to 1:3000 on Advantage and Advantage Plus Accounts.
Choosing the leverage on your account depends on the instrument you're trading too. More importantly, though, the leverage should be based on your personal knowledge and market experience.
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Does FXTM change leverage upon news release?
At FXTM, we maintain stable leverage during news releases. Our priority is to provide consistent trading conditions, and we do not typically adjust leverage or margin requirements based on market events or volatility.