The textual definition of "leverage" is to have the ability to control a large sum of money, without using or using a small part of their own money and borrowing the rest. For example, in Forex, you can control $ 100,000 with a deposit of $ 1,000. Their leverage, which is expressed in proportions, is now 100:1. Now is controlling $ 100,000 with $ 1,000. Let's say the $ 100,000 investment rises in value to $ 101,000 or $ 1,000. If I had to put yourself the entire capital of $ 100,000, your return would be a miserable 1% ($ 1,000 gain / $ 100,000 initial investment). This is known as leverage 1:1. Obviously, I think the 1:1 leverage is a misnomer because if you had

to raise the entire capital is trying to control, where is the leverage? Fortunately, it is leveraged 1:1, it is leveraging 100:1. Just had to put $ 1,000 of his money, so his return is an excellent 100% ($ 1,000 gain / $ 1,000 initial investment). Now I want to do a quick workout. Calculate its return if lost $ 1,000. If you calculated the same way I did, also known as the right way, end up finishing with a return of -1%, using a 1:1 and a leverage HP! -100% Return (loss) using 100:1 leverage. You've probably heard the old cliché that says "The leverage is a double edged sword" or "Leverage is a two-way street." Well ... as you can see, these photographs are not lying.