Let's take a concrete example to illustrate this leverage effect: Let's say you are investing $ 100 on the EUR / USD cross at 1.25 pips. At the time of closing your position, the EUR / USD cross reached 1.26 pips. Without leverage, your gain can be calculated as follows: 100 x (1.26 - 1.25) = 1 You would only earn one euro on this transaction. Now imagine the same operation with a leverage of 1: 100. In this case, your actual investment being € 100, you will speculate with € 10,000. Your winnings will then be calculated as follows: 10,000 x (1.26 - 1.25) = 100 You would earn $ 100 instead of $ 1. What is the Forex market? Of course, the greater your leverage, the more the potential gains will be. But this advantage is double-edged since the amount of your losses is also multiplied by the same factor. How to deal with the risk of Forex leverage: افضل شركات التداول عبر الانترنت As we have just indicated, leverage should be used cautiously and cleverly since your losses are also affected by this tool. Thus, with a leverage of 1: 100, the amount of your losses will also be multiplied by 100. If we take our previous example and imagine that our cross EUR / USD goes from 1.25 to 1.24 pips, you would lose 1 € without leverage and 100 € with leverage. The more leverage you have, the more you risk losing money.