Forex Leverage Calculator

Written by Steven Hatzakis
Fact-checked by Joey Shadeck
Edited by John Bringans

October 22, 2024

I’ve been using leverage as a forex trader for over 20 years; I created the ForexBrokers.com Forex Leverage Calculator to serve as an educational tool to help you better understand the relationship between forex leverage, trade sizes, and margin requirements in the forex market.

It's important to note that leverage can significantly increase both potential profits and potential losses for all forex trades.

Step 1: Select trade size (in units):

Step 2: Select your preferred leverage ratio:

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How to use the calculator

Here are some quick, step-by-step instructions for using the forex leverage calculator:

1. Select your trade size. Choose a hypothetical trade size from the dropdown menu (or enter a custom value). This figure represents how many units of currency are tied up in your hypothetical trade. For example, $10,000 USD would be 10000 units of currency.

2. Select your preferred leverage ratio. Though some brokers may offer 1000:1 leverage, these are often either scam forex brokers or firms engaging in questionable dealing practices – these brokers (and those leverage levels) are best avoided. Trusted forex brokers offering higher leverage will generally limit it to a maximum of 400:1 (and such leverage is only available in certain jurisdictions).

balanceLeverage in perspective

400:1 leverage would enable a trader to control $1 million worth of currency with just $2,500 in their account as margin, while 1000:1 would only require $1,000. These are potentially dangerous levels of leverage.

3. Click the button to calculate your margin requirement. The margin account you open with your forex broker has its own margin requirements that must be met before you can use leverage in your trading.

For example, if your forex trading account has a 10% margin requirement and you want to open a position worth $100,000, you’d need to deposit at least $10,000 as collateral. If you used the full $10,000 to open a $100,000 position, you would be using a leverage ratio of 10:1.

FAQs

What is leverage in forex trading?

Leverage in forex trading is a mechanism that allows traders to control larger positions (open larger trades) than would be possible with their deposited funds. By borrowing funds from a broker, you can increase exposure to the forex market without having the full value of the trade in your live trading account. needing the full value of the trade upfront. This borrowing is essential in forex, but it amplifies both potential profits and losses, making it a high-risk strategy.

Using leverage can lead to significant gains, but it also increases the risk of losing more than the initial deposit. Forex brokers may issue margin calls, automatically closing positions when losses exceed the available margin, to prevent traders from losing more than their account balance. Read my guide to leverage in forex trading to learn more.

What is margin in forex trading?

Margin refers to the amount of money a trader must deposit to open a leveraged position. This deposit acts as a form of collateral for the borrowed funds. Margin requirements are typically expressed as a percentage of the trade size. For example, a 10% margin requirement means you’ll need to deposit $10,000 to control a $100,000 position with a 10:1 leverage ratio.

How much leverage should I use?

The appropriate leverage level varies by trader depending on their risk tolerance, experience, and the specific market conditions, as well as any local regulations depending on your country of residence and the broker you use. As a rule of thumb, using less leverage reduces risk. whereas greater leverage can increase the potential risk proportionally. Most of the best forex brokers offer trading platforms with demo accounts, that allow you to experiment with leverage.

What forex brokers offer the highest leverage?

Many forex brokers offer varying levels of leverage, some going as high as 500:1. However, it's crucial to choose a broker that maintains strict regulatory compliance and offers sound risk management tools to help you avoid forex scams and to reduce your risk of dealing with a potential scam broker. Here are the best high-leverage forex brokers in 2024:

IG- Up to 200:1 leverage (in Switzerland)
Saxo- Up to 67:1 leverage (in Switzerland)
Swissquote- Up to 100:1 leverage
XTB- Up to 500:1 leverage
eToro- Up to 400:1 leverage
AvaTrade- Up to 400:1 leverage

Learn more about the best, well-regulated brokers that offer higher leverage by checking out my full guide to the best high-leverage forex brokers.

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About the Editorial Team

Steven Hatzakis is the Global Director of Online Broker Research for ForexBrokers.com. Steven previously served as an Editor for Finance Magnates, where he authored over 1,000 published articles about the online finance industry. A forex industry expert and an active fintech and crypto researcher, Steven advises blockchain companies at the board level and holds a Series III license in the U.S. as a Commodity Trading Advisor (CTA).

Joey Shadeck is a Content Strategist and Research Analyst for ForexBrokers.com. He holds dual degrees in Finance and Marketing from Oakland University, and has been an active trader and investor for close to ten years. An industry veteran, Joey obtains and verifies data, conducts research, and analyzes and validates our content.

John Bringans is the Managing Editor at ForexBrokers.com. An experienced media professional, John has a decade of editorial experience with a background that includes key leadership roles at global newsroom outlets. He holds a Bachelor’s Degree in English Literature from San Francisco State University, and conducts research on forex and the financial services industry while assisting in the production of content.