Leverage—let’s make it crystal clear with one example today.
Forex 1:100 leverage: you want to open 1 lot of EURUSD (a $100,000 position), but you only need $1,000 in margin.
If the price moves against you by 100 pips ($1,000), your margin is wiped out and you get liquidated.
If it moves against you by 100 pips the other way, your profit is also $1,000—you double up.
So leverage doesn’t change direction; it only determines how fast you get forced out or how quickly you double. What it amplifies is your risk budget, not your chance of winning.
Crypto comparison: for mainstream perpetual contracts, a common leverage is 1:10. If price moves in the opposite direction by 10%, you get liquidated. But forex at 1:100 means a move in the opposite direction of only 1% will liquidate you—steeper risk, so the saying in the forex world is “low leverage, big stop loss.”
There’s also a hidden cost: the funding rate on perpetual contracts—longs and shorts pay each other. The longer you hold the position, the more that cost gets built into your total expenses.
Remember these three lines: leverage determines how fast you live or die, not the probability of winning vs. losing; before opening a trade, calculate how many pips against you will trigger liquidation; leave enough margin before you talk about “amplification.”
#forex #杠杆 #contract
Forex 1:100 leverage: you want to open 1 lot of EURUSD (a $100,000 position), but you only need $1,000 in margin.
If the price moves against you by 100 pips ($1,000), your margin is wiped out and you get liquidated.
If it moves against you by 100 pips the other way, your profit is also $1,000—you double up.
So leverage doesn’t change direction; it only determines how fast you get forced out or how quickly you double. What it amplifies is your risk budget, not your chance of winning.
Crypto comparison: for mainstream perpetual contracts, a common leverage is 1:10. If price moves in the opposite direction by 10%, you get liquidated. But forex at 1:100 means a move in the opposite direction of only 1% will liquidate you—steeper risk, so the saying in the forex world is “low leverage, big stop loss.”
There’s also a hidden cost: the funding rate on perpetual contracts—longs and shorts pay each other. The longer you hold the position, the more that cost gets built into your total expenses.
Remember these three lines: leverage determines how fast you live or die, not the probability of winning vs. losing; before opening a trade, calculate how many pips against you will trigger liquidation; leave enough margin before you talk about “amplification.”
#forex #杠杆 #contract