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Insights/What Is Leverage? A Double-Edged Sword, in Numbers
GlossaryJuly 14, 20264 min read

What Is Leverage? A Double-Edged Sword, in Numbers

What Is Leverage? A Double-Edged Sword, in Numbers

“Leverage does not improve your odds -- it amplifies whatever was going to happen anyway.”

-- Ahmed Tahsin, Founder & CEO

The Direct Definition

Leverage lets you open positions larger than your actual capital by borrowing buying power from your broker. 1:100 leverage means every dollar in your account controls one hundred dollars in the market.

“Same move -- the only difference is direction.”

A Numbers Example

1

The capital

$1,000 at 1:100 leverage opens a $100,000 position

2

1% your way

You make $1,000 -- your account doubles

3

1% against you

Your account is gone

Why It Matters to You

The number one killer

Excessive leverage is the top destroyer of beginner accounts

Available is not used

Available leverage and actually used leverage are entirely different things

How professionals measure

Pros size risk by actual position size, never by the maximum allowed

The working rule

Calculated position size against capital, with a per-trade risk cap

The TIC Angle

TIC manages positions at sizes calculated against capital with strict per-trade risk limits -- never by maxing out what the broker allows. Results and volatility are verified on Myfxbook.

Risk notice: trading carries high risk and you may lose your capital. Past performance does not guarantee future results. Educational content only -- not investment advice.