Work backwards from the position you want to the leverage it demands — then look at what a routine 2% move does to the margin behind it.
| Leverage | Position on $1,000 margin | Loss from a 2% move | Class |
|---|---|---|---|
| 10:1 | 10,000 USD | 20.00% | Conservative |
| 20:1 | 20,000 USD | 40.00% | Moderate |
| 50:1 | 50,000 USD | 100.00% | Moderate |
| 100:1 | 100,000 USD | >100% — margin gone | Aggressive |
| 200:1 | 200,000 USD | >100% — margin gone | Extreme |
| 500:1 | 500,000 USD | >100% — margin gone | Extreme |
Borrowed exposure: the ratio between the value you control and the capital you post. 50:1 means $1,000 of margin controls $50,000 of position. It is a financing arrangement, not a strategy.
Required leverage = position value ÷ margin. Position value is units × price converted into your account currency, so it climbs with both lot size and the instrument's price level.
Not by itself. Leverage sets the collateral, position size sets the loss per pip. High leverage becomes dangerous because it permits a position size you could not otherwise afford — the risk arrives through that door, not through the ratio.
At 50:1, a 2% adverse move on the underlying wipes out 100% of the posted margin. The higher the required leverage, the smaller the move that erases the collateral — which is the honest way to read a leverage ratio.
PipSync is a signal execution tool. It does not provide trading signals, does not guarantee any trading results and is not investment advice. Trading leveraged products involves substantial risk of loss.