Leverage lets you open positions larger than your own capital. With 1:100 leverage, a 1-lot EURUSD position (€100,000) requires only about €1,000 of collateral. That collateral is called margin — it is locked on your account while the position is open.

Understand this clearly: leverage multiplies not only potential profit but also loss. A 1% price move against a position at 1:100 leverage means losing 100% of the margin. That is exactly why experienced traders use only a small part of the available leverage.

The key metric is margin level: equity divided by used margin. When it falls to the Margin Call level the broker warns you about insufficient funds; at the Stop Out level positions start closing forcibly. Negative balance protection guarantees you will never lose more than your deposit.

A practical rule: risk no more than 1–2% of your deposit per trade. Position size is derived from the stop loss, not the other way round: first decide where your idea becomes invalid, then choose a volume so that the loss at your stop does not exceed your risk allowance.