What is leverage trading?
Leverage trading is the use of a smaller amount of initial funds or capital to gain exposure to larger trade positions in an underlying asset or financial instrument.
Leverage trading is the use of a smaller amount of initial funds or capital to gain exposure to larger trade positions in an underlying asset or financial instrument. Financial instruments include forex (currency), commodities and indices. You can access these instruments through different brokers.
As a trader, you are looking to make a profit on the difference between the open price and closing price of your trade.
Without leverage, assuming you wanted to invest US$100 into buying EUR/USD, if the price moved in your favor by 1%, you would hold US$101. Similarly, if the price decreased by 1%, you would hold US$99.