Leverage lets you open a position larger than your balance, with part of the balance held as margin. It is a neutral tool: it magnifies profit and loss in the same proportion.
Three numbers to know before using it:
- The margin required to open the position and keep it open.
- The margin call level at which you are warned that your balance no longer covers your positions.
- The automatic close-out level at which positions may be closed without prior notice.
The practical rule: start at the lowest leverage available until your results settle over months rather than days, and raise it only as a considered decision. Remember that positions held to the next day may incur overnight financing.