Step by step
How to read it
- 1You open a position.
- 2Price moves 1% — a small move on the chart.
- 3With 1:30 leverage used in full, that 1% is 30% of the account. Up or down.
Watch out
Common mistake
Using the maximum leverage because it is offered. Size the position from your risk, not from what the account allows.
Hypothetical numbers
Worked example
- Example: 1,000 in the account, leverage 1:30.
- Largest position: 30,000.
- A 1% move = 300 — 30% of the account, either way.
In one line
Definition
Trading a position larger than the money in the account. It magnifies gains and losses alike.
Check yourself
Check yourself
You use the full 1:20 leverage. A 2% move against you costs about…