## 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.
