Originally Posted by Steven IS

Leverage, the classic question...

Lets try to explain it as simple as possible with an example:
A leverage of 200:1 means:
Your $1 in your account balance becomes $200 when you open a position. This means that a move on the market has a greater influence on your account, 200 times bigger than actually, this of course works in both ways, negative and positive.

So lets say you open a 1 lot with 200:1 leverage. 1 lot stands for 100,000. So with a leverage of 200 that would mean you use $500. (500*200)

So if your open position then gains 10 pips, you gain $10 with that $500. because it is 1 lot, you gain $1 for every pip. Same goes for losing pips.

I'll leave the rest to Christian