Leverage
Leverage is defined as the amount of borrowed capital to increase the potential of your investment. In other words trading on leverage increases your buying power, but if used improperly, it may also increase your losses.
Trading using leverage allows you to deposit a relatively small amount and trade with a relatively larger amount than what you have initially deposited. When used properly, leverage allows you to significantly increase the return on your initial investment.
For Example:
 Let’s assume you have invested $1,000 and would like to go long (i.e. buy) EUR/USD.
Using a leverage of 20:1, you have the possibility earning 20% on your investment with a 1% market move. To clarify numerically: if the market moves 1% in your favor, you earn $200 (20% of $1,000).
Forex trading offers the highest leverage amount in comparison to all other investment vehicles, such as stocks, futures etc. At Xforex, we offer a leverage of up to 200:1, vastly increasing your trading power. Please bear in mind that leverage is a double edged sword and it also increases your risk potential. However, this risk is limited only to the amount you have invested in your account. Xforex will never let you go into debt: you can never lose more than you have in your account.
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