Leverage lets you control a large position with a small deposit — it is the defining feature of margin trading, and the most misunderstood.
At 1:100 leverage, a 1% move against a fully margined position wipes out your entire stake. That is why professional traders size trades by risk, commonly 1–2% of account equity per trade, rather than by maximum position size.
Three practical rules: size positions from your stop-loss distance, not from available margin; never add to losing leveraged positions; and treat margin calls as a design feature of your risk plan, not an ambush.
This article is general market commentary, not investment advice. Trade responsibly.
