Leverage allows you to control a position much larger than the money you actually have in your account. It acts as a financial multiplier — and it works in both directions equally.
How Leverage Works
Say you have £5,000 in your trading account. With 10:1 leverage, you can control a position worth £50,000. If that position moves 1% in your favour, you make £500 — a 10% return on your actual capital. Without leverage, the same 1% move would return just £50.
Here’s the other side: if the market moves 1% against you with 10:1 leverage, you lose £500 — 10% of your account. With 20:1 leverage, a 1% adverse move wipes out 20% of your account. Leverage magnifies losses just as much as gains.
What is Margin?
Margin is the amount your broker requires you to hold to maintain a leveraged position — a good-faith deposit. If your losses reduce your account below a certain threshold, you’ll receive a margin call — a demand to deposit more funds or close your position immediately.
Leverage in CME Futures
Futures are inherently leveraged products. The margin required to hold one standard NQ futures contract is a small fraction of its true market value — which is exactly why risk management is non-negotiable.
The Golden Rule
Never risk more than 1–2% of your trading account on a single trade. Even a run of consecutive losses won’t destroy your account, and you live to trade another day. The APEX indicator calculates your stop loss and take profit levels automatically — making proper risk management easier to follow consistently.
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