Understand leverage · Why 1000:1 is bait, not a feature

The brutal math of leverage

$1,000 account, 1000:1 leverage, open 1 standard lot EUR/USD (100,000 units):

• 1 pip = $10

• -10 pip = -$100 = 10% of equity

• -100 pip = full liquidation

100 pip on EUR/USD? Average NFP volatility.

Why Tier-1 regulators cap at 30:1

2018 ESMA study: 74-89% of retail CFD clients lose money. Excessive leverage is a primary cause. FCA/CySEC/ASIC now mandate 30:1 max for retail.

So who is 1000:1 for?

Retail traders chasing get-rich-quick. A broker advertising 1000:1:

• Probably not Tier 1 regulated

• Probably registered offshore (VFSC / SVG)

• Profits when you blow up

Practical advice

• Beginner: 5:1 to 10:1

• Advanced: max 20:1

• Always run worst-case math first.