Simply put, leverage is financing and borrowing money. You don't have that much money to speculate, borrow money from the market maker. The principal is used as collateral. Once the floating loss exceeds the principal, it is a short position.

The lower the margin ratio, the higher the leverage. The same money can buy more goods, and the impact of market price fluctuations will naturally be greater and the risks will be higher.

If the margin for buying 1 hand EUR/USD is 100, the principal of your account is 100, and if the leverage ratio of your account is 100, then you can trade 1 hand, with the fluctuation point of 10. If the leverage ratio of your account is $65,438 +0: 200, then you can trade with $50 1 lot, and the fluctuation point is $65,438+00; The conclusion is that the higher the leverage ratio, the less deposits we use, and the more we buy under the same account principal, but the less our ability to resist risks; On the contrary, if the leverage ratio is low, the more margin used, the fewer buyers, and the greater the ability to resist risks.