Leverage

 

When you register a Trading Account you are requested to set Leverage like this. but what is Leverage.

Leverage

lets say you wanna buy an item of 100 USD and you only have 10 USD, then you would pay 10 USD and broker would borrow you 90USD so that you can buy. so this means your contribution is 10% and broker helped with 90%. then you would gain or or lose 10%.

Here is visual example of leverage, is like you are helped to lift assets that are heavier than your account balance. 
 

In forex trading - the Leverage is little bit complex and is set by computers to make forex trading easy and to avoid blowing accounts. 

If your Leverage is 100:1 - this means you contribute 1% in every trade. 

if you buy $100 units, 1% of the $100 units would be deducted from your account which it would equal to $1.

Standard lot size is says 1 lot = 100 000 units or $100 000. then 1% of 100 000 is 1 000. then 1000 USD would be deducted from your account when you sell or buy on 100:1 leverage.