04 - What is leverage? - easyMarkets - Education

[@2025Lax]

finally something useful and easy to learn about leverage~~~

[@oaksoepyei1649]

Very clear explanation for the first time traders. Thank you guys.

[@Content_838]

Update been 8 years 😂

[@noel7777noel]

"Trading" with leveraged is a forth-party banking fraud. For example, I'm the forth-party stuck in the rent trap. My landlord is benefiting from a third-party not-for-profit mortgage. Because my rent is based on a "market value". Thus creating a market bubble. Normal supply and demand is called capitalism. The best product wins, not the best person wins.. A capitalist is an adjective and not a noun. My landlord is turning capitalist into a noun. My rent can go up without any more or better product I am receiving.

[@Thiago7Mr]

best video explaining leverage... Thanks Guys

[@noel7777noel]

Leverage can be a crime. For example, having a cognitive dissonance of borrowing from a not-for-profit banking system to lend in a for-profit manner. Another example is a crime; borrowing from one market and investing in another. This is robbing the necessary funds to grow one market that the paying customers are asking for to take risks in a new market. Another example of a crime. Investing into making new markets come to life is at a risk. That risk averages out to a zero. Well. It's impossible to make a failed investment pay up. So you diversify your portfolio which would average out to zero. Because some lose and some win. Beating the market average of zero is done by you investing in my local neighborhood pizza restaurant and I don't invest in your local neighborhood pizza restaurant. So you will beat the average of zero. Another example; the rich investor invests in my rent and I don't rent their mansions to them. Don't turn leveraging into punishing the borrowers with other people's money. Leverage done right is a not-for-profit banking system. For example; A bank that only does car loans. The leveraged bank has a balanced budget. The bank uses the exciting car payments from past customers to lend out to new borrowers looking for new cars. Take a penny and leave a penny. Leveraged in this case - the bank has a bounce of car titles in the bank vault. This doesn't require lots of cash in their vault. The bank doesn't need your cash. The bank is leveraging so the bank doesn't need investors. The bank has a solid income of previous customers making car payments. The government doesn't need to spend deficitly. The bank doesn't need a trillion dollars in the bank vault. Just a lot of car titles in the bank vault.

[@noel7777noel]

Leverage can be a crime. Basically Investors with no money. For example, having a cognitive dissonance of borrowing from a not-for-profit banking system to lend in a for-profit manner. Another example is a crime; borrowing from one market and investing in another. This is robbing the necessary funds to grow one market that the paying customers are asking for to take risks in a new market. Another example of a crime. Investing into making new markets come to life is at a risk. That risk averages out to a zero. Well. It's impossible to make a failed investment pay up. So you diversify your portfolio which would average out to zero. Because some lose and some win. This called privatizing the gains and socialize the loses. Beating the market average of zero is done by you investing in my local neighborhood pizza restaurant and I don't invest in your local neighborhood pizza restaurant. So you will beat the average of zero. Another example; the rich investor invests in my rent and I don't rent their mansions to them. Don't turn leveraging into punishing the borrowers with other people's money. That would be a crime. Leverage done right is a not-for-profit banking system. For example; A bank that only does car loans. The leveraged bank has a balanced budget. The bank uses the exciting car payments from past customers to lend out to new borrowers looking for new cars. Take a penny and leave a penny. Leveraged in this case - the bank has a bunch of car titles in the bank vault. This doesn't require lots of cash in their vault. The bank doesn't need your cash. The bank is leveraging so the bank doesn't need investors. The bank has a solid income of previous customers making car payments. The government doesn't need to spend deficitly. The bank doesn't need a trillion dollars in the bank vault. Just a lot of car titles in the bank vault. A leveraged investor is broke. So don't ask that person for money. Their money is tied up. A lot of car titles in their vault and not a pile of money.

[@andrescastillo2043]

Smart men hires smarter people in the particular field for advises. It an eye opening for me and I have been able to embrace the fact. It is total waste of time to do something yourself when some professional will handling your trades the right way and generate more income.

[@jessicamegan5850]

Most people find it hard to seek knowledge and information out there. It only help to increase your chances, losing your hard earned money is no joke!

[@wilsonaaron3930]

Andres Castillo I just started trading and it scares me a lot since I have heard about so much difficulties involved. Do you have a better idea?

[@wilsonaaron3930]

Sure thing I will.

[@brianrosetti4684]

I am making progress with this already thanks guys!

[@mikenorman5172]

It has more excitement than any other business that I have been involved in.

[@guanafd]

Leverage. I used leverage through a bank loan based on deposit. What I did is I borrowed around 1000 euro and I took credit based on deposit, what that means is for my 1000 euro I had to put aside another little more than 1000 euro as a guarantee for the loan, BECAUSE I'm unemployed right now. So, from 1000 euros they became 2000 but I can only use half of it. I took the 1000 euros (with a maturity date on the loan 7 years from now) and invested them in single stock I believe in. I will get enough time in those 7 years to ride the stock market good or bad and in meantime dividends will compensate my loan interest which is 2% here in my country in Europe. And if price appreciation happens together with dividends, I will rock the bank from its foundation.

[@zhwzh_]

How did it go?

[@hansyasini9411]

What is a good strategy and how do you do analysis which turns into profits?

[@rosariadesantos5116]

A good Forex strategy is one which suits your trading style and what you can afford, but also one which matches your levels of experience in the market.

[@flighttherapybullisticfpv133]

hahahaha well thats the billion dollar question isnt it lol Wouldnt it be great if a random person on youtube would just give you that strategy? haha

[@rosariadesantos5116]

Eddybruke(.)info

[@staciesthespacegirl4151]

The biggest advantage of this way of earning money without a doubt would be the little time it requires. Being a college student, my time is very long, so I can not lose my focus on studies for a long time. I’m trading using his way and now everything has run smoothly and without stress! The yield is very good: I got my financial freedom and I no longer need to cut expenses.

[@wallstreetdreams6284]

Priorities may vary depending on the dealer, but the trust and honesty of a brokerage firm are very important to me. I have been working with Sir Bruke since 2018. At first my anxiety did not work, I lost money several times. But being a person with some patience, I managed to raise a lot of money recently. The brokerage never gave me problems with withdrawals. The company just approved my documentation and withdrawal of $16,300 without any problems. Thank you, Sir Eddy, I will stick with you for a long time! I wish you success!

[@limitless1692]

If you want to make money Don't use leverage.

[@kebman]

The *Golden Rule* within trading is ... _never_ take up a loan in order to trade. The broker takes profit _first_ thus you stand to lose everything you invested, _including_ your margin, if your trade goes south. But yes, if you do everything right, there's also a chance of profit. I say "a chance" because doing everything right is exceedingly difficult for most people. Even seasoned traders takes a few losses every once in a while - in fact good traders plan with losses in mind. Also consider that 70-80% of traders actually _lose_ money. So make sure you don't lose more than you can afford by simply refusing to invest with leverage. Consider leverage reserved for people with a proven track record, and a win/loss ratio of alot more than 50/50.

[@noel7777noel]

The right way to do leveraged, is to have a mortgage loan amount equal your retirement savings account. And if everyone in a country does this. The nation will have a balanced budget. If everyone does this with both the same interest rates, inflation won't happen. The wrong way to do leveraged. Becoming a landlord is stealing their tenants leveraged. How about you teach everyone how to do leveraged, vs stealing other people's leveraged. Leveraged then becomes a name of scheme. The philosophy of this scheme is to borrow from a not-for-profit bank and lend to for-profit bank. Levaged is basically broke, and a income stream for broke people. A cognitive dissonance of liking not-for-profit banking system. Than lending to a for-profit bank. For example; having a mortgage on a rental property. Levaged is basically dirt poor. This is the Glass-Steagall Act. My landlord stole my leveraged. And is charging me kickbacks for doing so. Leveraged is one with a mortgage and a retirement savings account.

[@kebman]

​@@noel7777noel Sure, anyone can use leverage *_if used right._* Yes, everyone can also dance on a line between two New York skyscrapers *_if done right._* But would you really?

[@noel7777noel]

​​​​​​​​​​​@@kebmanAnyone doing leveraged where everyone can NOT do it is called banking fraud. Vs. Leveraged where everyone can do it is legal. Where are the financial advisors on the proper way to do leveraged. Why would someone pass up free money? Why would any home owner pass up a second mortgage offer. And why is a bank letting a second mortgage be approve breaking the leverage rule I remember before the last housing crash, everyone was getting second mortgage offers in the mail left and right. Is it the fault of that person their house went into foreclosure because they had a second mortgage. They had a second mortgage they could not refuse, or handle. The banks letting second mortgages happen breaking the levaged rule. Or a social media platform sold. The old owners had a offer they couldn't refuse. Now the new owner of the social media platform has a second mortgage they can't handle. The new owner of the social media platform breaking the levaged rule. Why would the old owners refuse free money and not sell. AKA inflation. Supply and demand math chart doesn't have that sale making sense. But why would the old owners refuse free money? And everyone knows how a second mortgages are a kiss of death. But great spending money. Where are the financial advisors on the proper way to do leveraged. And a way everyone can do it. Not just the narcissist.

[@kebman]

@@noel7777noel Yes. I agree. I should just give my money to some financial advisor. Perhaps you? Then you will invest it _for_ me, using leverage the _right_ way! Sounds like a great idea! Which person do you recommend that I invest in? And will 100k be enough to start with, just as a test?

[@ganguskhan4504]

Just trade the 1:1 leverage.. best way to make your money. Your just giving the broker the advantage with the leverage. 1.00 for every pip best way to do it.

[@IDARYASSYN]

With your original 1,000$ invesement with 1:1 leverage, you'd only make 10cents per Pip. In this vidéo, the price moved with 100 pips, meaning, 1 $ profit.

[@souvikghosh5087]

NICELY EXPLAINED.

[@RukundoChristine-ih2pq]

Well explained

[@Sithembile499]

I have advised some people in the past to take up trading in the forex market as full time or part-time activity.

[@liuzhejiang107]

This should be taken up as a serious business activity and not for passing the idle time.

[@Carpenglerrr]

But most people around would advise you to stay away from the forex markets because they think that it is dangerous, and you will end up losing money.

[@faux982]

Yes, it is dangerous if you don’t know anything about how the forex markets work. If you don’t know anything about stock markets and are not even planning to know, then don’t invest directly in stock markets, invest through mutual funds.

[@brodericks7391]

But what if I wanted to invest directly in the forex market?

[@faux982]

Skilled investors have been able to make millions off of trading forex, there is no denying that but that is not how it’s going to be for everyone. In all honesty, people who have gone on to make it are people who have traded with the best brokers.

[@lucasnyeinchan399]

easy to understand now ,thanks

[@TheMustang064]

good explanation. Thank you

[@0yh964]

Here, I get confused. If I can multiply my profits as well as losses by using a leverage, how about the lot size? I can see like both can multiply the profits as well as losses. Help me in this

[@ammarkashif46]

I have just started and i wanna to start it with 20$ now how much leverage should i use in forex trading?

[@kr1shnaraja]

1:100

[@K_wibisono]

Thank you!!!

[@nonamenoname2618]

I am completely new to investment. Does leverage have any added value? Genuine question. It seems to me like a speculation tool - spot a trend, ride on it, sell before it bursts

[@shahedalkamal9459]

The most important factor in Forex is leverage. Leverage is expressed by ratio and it is on the base of margin requirements by broker. Leverage depends on broker. But you have to be wise in using leverage. You will get high leverage if you are able to maintain minimum 2% margin in your account. This is the most powerful tool to make huge profit. As a trader I prefer high leverage to make profit ECNCAPITAL.

[@psychospin1]

This is my first time learning about these things, so I have one question if you don't mind. I get it that if you leverage you can get higher profits when the market goes up. But what happens if the market goes down? Let's take the example from the video. I invest 20k at 5:1 leverage. The property increases value of 50% so I take 50k profit. But what if the property decreases value in 50% instead, what happens, how much do I lose? Thank you in advance. Cheers

[@speedwayman100]

50,000.00

[@kannaiyand2707]

Using leverage if positive then unlimited Profit and 100% loss if negative. Here 20% You may ask Why ? answer is your contribution consider as margin and every day your margin will calculated and your margin near to zero in that case your position will be sold (MARGIN RISK) if there is no margin risk calculation then your lose will be unlimited loss.

[@martinkanchev7569]

your initial capital is what acts as coverage in case something goes wrong. Ergo the position will be closed and you would loose it all as soon as the minus on your position reaches that level. (ex. u started with 10 bucks your position regardless of leverage cannot go more into red than those 10) And about the up and down it is exactly as much (50k). You will win 5 times more or loose 5 times more.(5 times more means 5 times faster if u use 2;1 leverage you would survive lets say a drop of 20 pips but if u used 4:1 it would be only 10pips and 8:1 5 pips etc.)

[@Dalaxilama]

Martin Kanchev so basicaly, if I have 200$ in my account, even if the leverage acts as if I have 2000, I cannot lose more than my 200? ( I am still fairly new to trading and it is something I wasn’t too sure about )

[@ai.simplified..]

Leverage is why forex maybe a scam

[@gabrielsundayabraham896]

Thanks

[@wedgythewedges5489]

would like to ask that, if i invest 500usd and with most of the trades of 0.01 lot, is 1:400 leverage ok? i not sure if leverage is affect if i always trade 0.01 lot,

[@retsenoj9419]

very informative. thank you

[@ahsanullahshanto3992]

Leverage involves borrowing a certain amount of money. In the case of forex the money is borrowed from broker. Usually a trader goes for a high leverage providing broker. As a high liquid broker I always rate Trade12 because with the broker I have flexible high leverage like 1:400.

[@fredsk877]

thanks for the info! dumb beginner question but am I understanding this correctly?.... If I were to open a position with 100 dollars for instance, and I have 10:1 leverage, it means I am trading with 1000 dollars - so if I invest this in a stock because I think the value will go up (and it does) all I have to do is close the position, the broker gets their investment back and I make more profit than I would have done if I hadn't used leverage. What happens if I open a position with the same investment/leverage and the stock price drops dramatically? Could I potentially end up loosing an entire 1000 dollars, even though I only invested 100 dollars of my own money? If the share price dropped to almost nothing, could I not wait until the share price goes back up again before paying my broker back? Are there deadlines for returning the broker's money? If anyone could let me know, it would be greatly appreciated!

[@sylvainpanneau6460]

Excellent question, did you learn anything new ?

[@nwate7]

fredsk877 good question. Curious to know the answer myself.

[@n3v3rkonform47]

That's pretty much my question as well, in conclusion to the video.

[@juanrojas6502]

You can only lose your investment, since its 10:1 leverage every 1 pip is multiplied by 10, therefore if it goes the other way and goes down 10 pips you actually are at 100 pip lose which means you lose your investment. Nothing more.

[@juanrojas6502]

Loss*

[@user-dv2ji5ou7t]

I'm confused 😕 how in the example did he make a 10 pip profit what if instead of it being 1.3130 it went up 1.3150 is that a 20 pip profit??

[@secretchambernoname]

Thanks for this video. It's very well explained. I can calculate your examples without any problems, but I do have an issue with the reasoning behind it. We have invested euros into US dollars. The rate changed from 1.3130 to 1.3140, meaning that now is euro even stronger compared to dollar than it was before. So have come we made profit and didn't lose money? I don't know if I am understanding the message correctly because english is not my first languege . I hope my concern makes sense. Thanks again.

[@jeffreyluzon6296]

He was holding euros, not usd so he made 10 pips when he sold it for usd

[@YourBoyDany]

As jeffery said above, He was to LOSE 10 pips if he were Holding USD.

[@priyajha7531]

Thank you

[@jamesmichaels4979]

Were dafaq can i buy a studio for $20,000???

[@timtim-bo8jy]

Means small home

[@intensetwitch7556]

Does CFD platform affect the stock when the leverage is 1:1 ?

[@rahimsterling1178]

Forex leverage is the best thing or option among others which provide by traders or investors brokers. This video explain leverage in a great way. I love to watch more videos like this one. Investors should be cautious about taking high leverage risk with their trades, specifically this advice is for new traders. My broker ECNCAPITAL also giving their customers the best leverage facility. But we are using this with proper plan.

[@nicholaszuazo183]

Can you sugget some book. Please

[@easyMarkets]

Hello Nicholas Zuazo, Thank you for reaching out to us. We have a wonderful Learn Centre on our website with very informative articles, eBooks and videos. You can access our Learn Centre through our website by clicking on the following link: www.easymarkets.com/eu/learn-centre/ . Should you have further questions, our Customer Service Specialists are available 24 hours a day, from Monday to Friday - just visit our Live Chat through our website www.easymarkets.com/eu/. Have a nice day!

[@muttaqinasanzida7822]

Leverage is one of the most important financial trading tools to earn huge money rapidly in Forex trading. And we the traders need to check the leverage ratio when selecting our brokers to get the right leverage facility. I prefer the high trading leverage and this is why my broker is Forex4you who is a regulated and licensed trading broker and give the flexible high trading leverage 1:1000 for earning profit rapidly.

[@YourBoyDany]

Damn

[@ai.simplified..]

1:36 &lose 5time more too,am i right??

[@touhidhasanshakib9727]

When trading leverage is open, I'm not sure about the time of the Butte Profit

[@ShinobiRank4]

what do u mean with , deal size and what do u mean with investment ? deal size is the balance u have on ur broker ?

[@easyMarkets]

Hello Spiridon, Thank you for reaching out to us. You can choose the size of the deal or position that is opened. A standard lot is equivalent to $100,000 of base currency. A mini-lot which is one-tenth of a standard lot, is worth $10,000 of base currency. Five standard lots is worth $500,000 of base currency. Investment is the amount that you invest from your free balance to open the position you desire. For more information please visit our Learn Centre on our website www.easymarkets.com/int/learn-centre/ . Have a nice day!

[@OscarMartinez-cf1hq]

so if the housing market completely crashes and the house price is now 0, you are now 80k in debt? why would you not mention this?

[@McBernas-mi6ve]

Thats why they mentioned risk management strategy

[@sriramvarma1118]

So leverage is the ratio between how much you would have paid and how much you do pay at the moment to access the asset? I still don't get how a greater leverage increases the degree of profit or loss? That confuses me a bit

[@easyMarkets]

Dear Sriram Varma, you can find out more about leverage on our website here www.easymarkets.com/eu/learn-centre/discover-trading/what-is-leverage/. Should you have further questions please contact our customer support team on Live Chat through our website www.easymarkets.com.

[@mzs114]

Loss scenario? 😂

[@giannistzorbatzakis5452]

because I'm confused, lets say we have the 20000$ and with the same 5:1 leverage we "have" 100000$ if our investment has a 10% increase it goes from 100000$ to 110000$ then does the broker get 100000$ from that thus leaving us with 10000$ and we end up -10000$ or does he take 80000$(because that is the amount he lended) and leaves us with 20000$ profit? And also can we hold the deal as long as we want until it makes profit even if in the meantime its value went down even to the point where we weren't, at that time, able to pay off the lended money(I don't know if it is called margin money) thanks in advance to anyone answering

[@hanzfranz7739]

How to lose even more money in an even shorter amount of time - the video

[@forexmaster2947]

with 1:100 leverage on 100 $ which is 10,000 and my lot size is 0.01 then Q.: how much #PIPS i got? anyone guide me

[@piperjones3227]

0.01÷(number you're landing on) x 10,000

[@piperjones3227]

Example. 0.01÷77.60 ×50,000 =64.44

[@MegaBigNash]

Best leverage site please ?

[@uc3606]

I'm using staxcapital broker, I'll recommend it for you. It makes me profit trading with leverage.

[@uc3606]

[phone]

[@KennTollens]

If I get 100:1 on $100 and the trade goes down 1% and I sell, then I lose my entire $100. What if it went down 2%, then I owe the broker $200 when I only have $100?

[@user-hf6os1qb2w]

The trade should automatically close when you hit stoploss thresshold or you lose 100%

[@silversimon4487]

@32 seconds , to explain here's margot Robbie in a bath tub.

[@antonrukhlin2270]

it's 1 to 4, not 1 to 5. because it's 20%

[@radix3d]

Video is correct. 1/4 is 25% not 20%.

[@antonrukhlin2270]

@@radix3d not it's not. "1 to 5" is "1/6" and is 16.67%. sounds like the author does not know the difference between "1:5" and "1/5".

[@nicoherrerai]

Radix no, it’s 4 to 1 because your debt is 80,000 and your equity 20,000, 80,000/20,000= 4 Not 5🤦🏼‍♂️ Basic basic math

[@nicoherrerai]

Anton Rukhlin in other words you put 1/4 of what you asked for The ratio is between debt and equity, not between the total value of the asset and your equity, the guy who made the video is a moron

[@samuelstrachan2726]

I've never seen someone tell beginners to use leverage...

[@Christopher-bu3eg]

It's not appropriate

[@Christopher-bu3eg]

Especially for newbies

[@Christopher-bu3eg]

You should learn the basics first

[@Christopher-bu3eg]

I just did the other way, not leverage. Forex trading is profitable

[@robinism1111]

But i smell there is some problem here, how can we tell that $50000 is profit, bcoz due to bank loan we must pay interest

[@barryheaps4360]

Why do all these leverage tutorials ignore the fact that a loan has been taken out to purchase the property (£80,000 in this case) which, presumably has to be repaid? It does that not matter?

[@OscarMartinez-cf1hq]

he does pay it back.. that's why the profit is 50k and not 130k

[@indexplus]

Leverage works both ways - 2008 to Ivy League Losers on Wall St

[@Thezemon]

that dark dot made me to wipe the screen multiple times

[@ewanduplessis9682]

Still dont understand

[@geooldman567]

THANKS!!!!!!!!!!!!!!!1

[@showery1376]

So if you invest 100 into a 10000 deal size, and it dosen't go well, do you lose 100 or even more than your investment? Do you go into debt??

[@robortalien]

What if it is gone down ? Never mentioned that🤣

[@bernapas9020]

If there were no risk everyone would be rich

[@drewberry8945]

If it's 10 to 1 leverage. For £100 investment. Your position is worthless at £90. The option is gone even if it goes up.

[@KAMIL_SYED-]

Time Passed so fastlY 😢

[@YaBoyfelipe]

Yall copied xbox intro lol

[@MyFindlay]

Hey question, someone set me straight- in the example: they invested 1k leveraged at 1:100 to control 100,000 units (1 lot) wouldn't that mean each PIP is worth $10. and a 10 PIP appreciation would equal $1000.... am I missing something????

[@MyFindlay]

never mind, lol basic math.

[@speedwayman100]

itd be 100 dollars lol

[@cinemaart216]

Masak sih.. beneran

[@herby9998]

So is there no point in using leverage unless you have the majority of your accounts capital in the trade? In other words, why use 1:2 leverage to trade if using 10% of your capital when you could just use 20% of your capital with no leverage. Am I understanding this correctly?

[@kamrantaqvi]

(y)