Leverage Calculator
Calculate the leverage ratio you're using based on position size and account equity.
Your Position
Position value = Lot size × Contract size × Price. For 1 lot EUR/USD at 1.10, position = $110,000.
Understanding Leverage
- Leverage = Position Size ÷ Equity.
- 1:100 leverage means a 1% price move = 100% of your equity at risk.
- Lower leverage is safer. Most professionals use 1:10 or less.
- EU regulations limit retail forex to 1:30 max leverage.
What is a Leverage Calculator?
A leverage calculator helps you understand the relationship between your position size, account equity, and effective leverage. It shows how much buying power you're actually using.
While brokers offer high leverage (1:100, 1:500), professional traders typically use much lower effective leverage. This calculator helps you stay within safe limits.
Key Features
- Effective leverage calculation
- Position size analysis
- Margin requirement display
- Risk exposure visualization
- Regulatory limit guidance
- Safe leverage recommendations
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Frequently Asked Questions
Leverage is the ability to control a large position with a small amount of capital. 1:100 leverage means you can control $100,000 with just $1,000. It amplifies both profits AND losses equally.
Offered leverage is the maximum your broker allows (e.g., 1:500). Effective leverage is what you actually use based on your position size vs account equity. You should always use much less than the maximum offered.
Most professionals use 1:10 or less effective leverage. Some successful traders never exceed 1:5. The idea that you need high leverage to make money is a myth that destroys retail accounts.
ESMA introduced leverage limits (1:30 for major pairs, 1:20 for minors) to protect retail traders. Studies showed that higher leverage correlated strongly with account losses. Lower leverage = more sustainable trading.