GlossaryAccount and money

Leverage

The ratio between the size of a position and the deposit your broker requires to open it.

Source ESMA

Leverage tells you how big a position the broker lets you control per unit of your own money. 1:30 means thirty units of exposure for every one unit of equity.

In the EU, ESMA's product intervention measures cap retail leverage at 1:30 on major forex pairs. Other instrument classes get tighter caps: 1:20 on non-major currencies and major indices, 1:10 on commodities other than gold, 1:5 on individual equities, 1:2 on crypto. The UK FCA mirrors the same limits. Other jurisdictions go far higher: 1:100, 1:500, sometimes more.

The pitch around high leverage is always the same: more leverage, bigger gains. What gets left out is that bigger gains and bigger losses come from the same equation. Price moves the position, not the margin. A one percent move on a 1:30 position hits about thirty percent of your deposited margin, before commission and swap. Run the same move at 1:500 and the math gets ugly fast.

What matters in practice is not the broker ceiling. It is the exposure the strategy actually uses. A well-sized algorithm on a 1:500 broker can run less leverage than a poorly-sized one on a 1:30 broker. The broker setting is just the room the strategy is allowed to move in.

The strategies on Javlot declare the leverage they were designed against. The broker ceiling is the upper bound, not the operating point.

Glossary entries are educational. They describe how a term is commonly used in automated forex investing, including on the Javlot platform. They are not a personalized recommendation and not a forecast. Past performance does not guarantee future results.