WickCheck / Trading school / Leverage
LeverageBeginner
Borrowed buying power: 1:30 leverage lets $1,000 control a $30,000 position.
What it means
Leverage does not change how much you should risk; your stop and position size do that. High leverage only means less margin is locked up. It becomes dangerous when traders use it to open positions far bigger than their stop can justify.
How to spot it
- Check the margin a trade needs compared with your account.
Common mistakes
- Thinking more leverage means more profit. It means faster losses when sizing is wrong.
Related terms
MarginThe money a broker sets aside from your account to keep a leveraged position ope…Position sizingChoosing the trade size so a stop-out costs a fixed amount, usually a small % of…Lot sizeHow big a position is. One standard lot in forex is 100,000 units of the base cu…
Why most strategies need a human behind the screen
Read the lessonWhat a mechanical test can and cannot tell you about smart money concepts.
Education only, not financial advice. Definitions vary between teachers; these are ours, written for clarity.