Leverage and margin are two core concepts every trader needs to understand. They allow you to control larger trades with a smaller amount of your own money, but they also come with important risks. Let’s break down what leverage and margin mean, how they work together, and how Axiory supports you with high leverage and effective risk management tools.
What is Leverage?
Leverage means borrowing money from your broker to increase the size of your trading position. Instead of using only your own funds, you can control a bigger trade. For example, with leverage of 1:100, every 1 USD of your own money allows you to trade 100 USD in the market.
At Axiory, our Max Account offers leverage up to 1:2000. This means you can control up to 2,000 USD for every 1 USD you invest. Such high leverage provides greater flexibility and the chance to maximize market opportunities with less capital. However, it’s important to remember that leverage can magnify both gains and losses.
What is Margin?
Margin is the money you must have in your account to open and maintain a leveraged position. Think of margin as a security deposit that guarantees you can cover the trade.
For example, if you want to open a 100,000 USD position with 1:100 leverage, you need 1,000 USD as margin. The higher your leverage, the less margin you need to control the same trade size. Conversely, lower leverage requires more margin.
How Leverage and Margin Work Together
Leverage and margin are closely connected. Higher leverage reduces your margin requirements, meaning you can open larger positions with less money. But this also means your trades become more sensitive to price changes, increasing your risk exposure.
If the market moves against you and your account equity falls below the required margin level, you will receive a margin call or your positions may be closed automatically to prevent losses exceeding your balance.
Risk Management with Leverage and Margin at Axiory
Using leverage wisely is essential to protect your capital. Axiory provides a variety of trading accounts, including the Max Account with leverage up to 1:2000, allowing you to select the leverage level that fits your trading style and risk tolerance.
To help you manage risk, Axiory offers advanced tools like stop-loss orders, which automatically close positions at predefined levels to limit losses. Additionally, Axiory’s negative balance protection ensures you cannot lose more than your deposited funds.
Conclusion
Leverage and margin open powerful possibilities in forex trading but require careful understanding and management. With Axiory’s flexible leverage options, tailored to each account type, and built-in risk management tools, you can trade with confidence while staying in control of your risk.