What is leverage?

In trading, leverage refers to the ability to control a large position in the market with a relatively small amount of capital. It involves borrowing funds to increase the size of a trade beyond what would be possible with the trader’s own capital alone. Leverage is expressed as a ratio, such as 50:1 or 100:1, indicating the multiple by which the trader can amplify their position. While leverage magnifies the potential profits of your strategies, it also increases the size of losses and may impact your performance in our challenges.