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3000:1$1From 0.0 PipsRead the full review
1000:1$0From 0.0 PipsRead the full review
500:1$200From 0.0 PipsRead the full review
400:1$0From 0.0 PipsRead the full review
500:1$200From 0.0 PipsRead the full review
500:1$200From 0.0 PipsRead the full review
400:1$250From 0.1 PipsRead the full review

What is leverage in trading?

Leverage in Forex trading or trading other financial instruments, like CFDs or stocks, means having more capital – money – to utilize. If they have higher leverage, traders have more capital at hand to invest. Stock traders call this trading on marginHigher leverage in trading provides the opportunity to gain bigger profits. On the other hand, it also increases the risk of larger losses. Leverage increases traders’ buying and selling ability in the Foreign Exchange or another market by providing virtual, non-existent capital. This money is borrowed from the broker that offers leverage. Traders should notice that they enter high risk territory when they trade on margin.

As an example, when a trader uses a 100:1 leverage on his Forex account, he can control 100 times the amount of money he has in his account. If the trader in our example has a standard trading account with a balance of $1,000, he would be able to open a trade worth $100,000 and trade ForexCFDs or other instruments. With this amount of exposure, the trader’s account can grow or shrink much faster than possible without the extra margin.

What are the risks of high leverage?

In Forex trading, the risks of using high leverage are quite simple: The higher the leverage, the greater the risk of losing substantial amounts of money. On the flip side, this also means that higher leverage can be translated into higher gains: The higher the leverage, the greater the chances of accessing bigger profits.

When it comes to leverage, it all depends on how much risk a trader is willing to take. Let’s go back to our previous example of a Forex trader who has an account balance of $1,000 with leverage set to 100:1. The trader could lose their $1,000 in a matter of minutes if they initiate a trade worth $100,000.

What are the advantages of using high leverage?

As dangerous as it can be to use high leverage in trading the markets, it can also be exciting and very profitable. The ability to control more money than what is available in one’s account allows traders to make bigger profits on winning trades. When a trade moves in the right direction, all profits are multiplied by the factor of leverage a trader chooses. Another benefit is that these bigger profits can be accessed without having to invest all the money leveraged on the trade. Margin trading allows for lower deposits and higher gains. With little investment and high leverage, a trader can trade, for example, not just a 1000-unit lot and earn $0.10 for each pip, but go for a 10,000-unit lot, where he will earn $1 dollar per pip.

Examples of trading with high leverage

Traders can select from many Forex brokers that offer different maximum leverage levels. Most brokers also allow traders to choose between various trading account options, trading platforms (MT4MT5 or cTrader) and maximum leverage settings. Brokers that are no market makers but instead offer a STP (straight-through-processing) or ECN (electronic communications network) model offer an excellent trading environment for retail traders. Costs or commissions on Forex or CFD trading are usually low, and there are many Forex brokers available that offer high maximum leverage as well. IC Markets is one of the Forex brokers that offer a true ECN trading environment and max leverage of 500:1. They are licensed and regulated by the ASIC (Australian Securities and Investments Commission) and attract clients from all over the globe. Let’s say we hold a true ECN standard account with a regulated broker like IC Markets and we deposit $1,000 to get started and trade on the popular MT4 trading platform. We select medium leverage of 200:1 and trade the popular EURUSD pair. If we invest $100 in a short position, we would have an exposure of $20,000. If the price moves against us, we could lose our $100 as well as our remaining balance very quickly. If the price moves in our favour, we would gain 200 times the profit that would have been possible without a 200:1 leverage.

Highest leverage offered by brokers

One of the highest leverages offered by Forex brokers is 3000:1. The internationally renowned Forex broker FBS offers this level of maximum leverage on some of their available account types– the highest leverage on the market!

Other popular Forex brokers, like Alpari, offer maximum leverage levels of up to 1000:1. Well recognized, internationally operating brokers like IC Markets, Vantage FXPepperstone, Admiral Markets or XM have maximum leverage levels of up to 500:1 on offer. Other top brokers that offer high leverage of up to 400:1 include AxiTrader, ThinkMarkets, and easyMarkets.

High leverage ECN brokers

Our review shows that many of the top Forex brokers offer maximum leverage of either 500:1 or at least 400:1 and a maximum of 3000:1. Many of these brokers are ECN brokers. ECN trading allows traders to access the actual pricing of instruments as set by the banks and liquidity providers rather than relying on the broker to set the price. This means that top brokers, like IC Markets, AxiTrader, FBS or Vantage FX, offer high leverage and ECN execution. They are no market makers but offer straight-through-processing of trades. This means that it is not the broker who sets the price, but it is the market itself.

Limitations of leverage in countries due to regulation

Brokers based in the UK or anywhere in Europe have been limited by the ESMA (European Securities and Markets Authority) to offer maximum leverage of only 30:1. The 30:1 maximum leverage is only available for major currency pairs. Non-major Forex pairs, cfd gold, and major stock indices have a maximum leverage of 20:1 available. All these limits have been applied to retail clients and are for all UK/Europe-based brokers. Japan has a maximum leverage cap of 25:1. Singapore and the USA have a maximum leverage limit of 50:1.

High leverage for the UK and European retail traders

Traders who are based in the UK or anywhere in Europe are free to choose a broker that has a no leverage cap of 30:1. International Forex brokers based outside the UK/Europe accept clients from European countries. These brokers typically offer popular trading platforms like MetaTrader4 and 5, cTrader or their own proprietary trading platform. Many top FX brokers are headquartered in Australia or Cyprus. Most of them are licensed and regulated with, and regulated by, either the ASICCySEC (Cyprus Securities and Exchange Commission) or FSCA (Financial Sector Conduct Authority) of South Africa. These are strong regulators with very strict rules similar to their European counterparts. Many sophisticated traders choose brokers that are based outside of Europe and the UK even if they are not regulated by the FCA (Financial Conduct Authority) of the UK or other European regulators.