Leverage

Leverage is expressed as a ratio — for example, 1:50 means that for every $1 of your own capital you can control $50 in market value. This allows traders to participate in larger moves with a smaller upfront cost, known as the margin.

While leverage magnifies profitable trades, it equally magnifies losing ones. A 2% adverse move on a 1:50 leveraged position would wipe out 100% of the margin placed for that trade. This is why risk management — setting stop-losses and sizing positions carefully — is essential.

Regulators cap leverage for retail clients in many jurisdictions. In the EU and UK, the ESMA/FCA rules limit leverage to 1:30 on major forex pairs and 1:2 on cryptocurrencies. Offshore brokers may offer higher ratios, but with less regulatory protection.

Professional traders typically apply far less leverage than the maximum permitted, reserving higher ratios only for very short-term trades with tight stops. Effective leverage (position size ÷ account equity) is a more meaningful measure than the maximum offered by a broker.

TrustFinance compares regulated brokers by the leverage tiers they offer, their margin-call policies, and the client-fund protections they provide — helping traders choose a broker whose risk parameters match their strategy.