leverage is the ratio of the value of a transaction to the amount of money required to finance it. For example, if you have $1,000 in your account and you want to trade a $100,000 position, you would need to use leverage of 100:1. Leverage can be a double-edged sword, however. It can amplify both your profits and your losses, so it is important to use it wisely. Leverage is an important tool that allows traders to trade on the forex market with a smaller amount of capital than would be required if they were trading without leverage. Leverage can be a double-edged sword, however. It can amplify both your profits and your losses, so it is important to use it wisely. Leverage can be a great tool for traders who know how to use it correctly. However, it is important to remember that leverage can also amplify your losses as well as your profits. Therefore, it is crucial to use it wisely.