Leverage

The leverage allows the trader to trade with large positions, even with a small capital. If a trader e.g. opens position of one lot, the standard are 100,000 units of a currency, then he must by the leverage represent only a small amount of the price itself, and the rest is financed through borrowing.

In a example it looks like this:
You want to open a position of 0.01 Lot (1000 units) to a value of € 1,000. If you now use a 200:1 leverage, you define yourself € 5, - for trade with the broker (margin) and the lack of funding balance. Thus, the broker who funded his sum not lose, if your trade goes into the red, he will close the position when the loss reaches the level of the contribution made by the trader (margin call). In this way, you can never lose more than the contribution you've made. Never let it come to a margin call, you should never forget to set the stop / loss for a position. Please read our article about money management.