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 actual leverage you're using based on your position size relative to your account equity. This is different from the maximum leverage offered by your broker.
Effective leverage is one of the most important risk metrics. Even if your broker offers 1:500 leverage, using more than 1:10 is considered aggressive by professional standards. Understanding your true leverage helps prevent over-trading.
Key Features
- Real-time leverage ratio calculation
- Margin percentage used
- Position multiplier effect
- 1% price move impact analysis
- Simple two-input calculation
- Professional leverage benchmarks
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.