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Understanding leverage and margin

Leverage is one of the most important concepts in forex trading. Here's what you need to know.

Updated in the last hour

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What is leverage?

Leverage allows you to control a larger position with a smaller amount of capital. For example, with 1:100 leverage, you can control a $100,000 position with just $1,000 in margin.

NEOMAAA offers leverage up to:

  • Cent Account: 1:1000

  • Standard Account: 1:500

  • Raw Account: 1:200

What is margin?

Margin is the amount of money required to open and maintain a leveraged position. It's calculated as:

Required Margin = Position Size / Leverage

Example: Trading 1 lot of EUR/USD (100,000 units) at 1:500 leverage:

Required Margin = $100,000 / 500 = $200

Margin call and stop out

  • Margin Call: A warning that your equity has dropped to 50% (Cent/Standard) or 60% (Raw) of used margin. You should consider closing positions or adding funds.

  • Stop Out: If equity drops to 30% (Cent/Standard) or 40% (Raw) of used margin, your most losing position will be automatically closed to protect your account.

Key takeaways

  • Higher leverage lets you open larger positions with less capital, but also amplifies losses

  • Always use stop losses to manage your risk

  • Monitor your margin level in the Trade tab of MetaTrader 5

  • Consider using lower effective leverage even if high leverage is available

  • NEOMAAA provides Negative Balance Protection — your losses cannot exceed your deposit

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