How Leverage Works at FxPro

Leverage at FxPro lets a client open a position that is larger than the cash actually set aside for that trade. The client provides margin - a blocked deposit - and the rest of the position value is financed by the provider. In practice, a leverage ratio such as 30:1 means every 1 CAD of margin controls 30 CAD of notional exposure. Required margin is calculated as position value divided by the applicable leverage. Profit and loss, however, are always based on the full position size, not only on the margin amount. This is why even modest price moves can translate into large percentage gains or losses on the account. In Canada, leverage on major forex pairs is typically limited to levels such as 30:1, and more volatile instruments often have lower caps. Using smaller effective leverage, stop-loss orders and conservative position sizing helps keep the risk of margin calls and forced liquidation under better control.

Basic operational flow usually looks like this:

1. Fund the trading account.
2. Choose an instrument and trade size.
3. Check the margin requirement shown in the platform.
4. Set stop-loss and take-profit (optional but recommended).
5. Confirm the order and monitor margin and equity.

Margin is the part of the account balance that is locked to support an open position. It is not a fee and returns to free balance when the trade is closed, adjusted for any profit or loss. The smaller the available leverage, the higher the margin requirement for a given trade size.

In forex trading, position size is commonly expressed in lots:

• Standard lot: 100,000 units of the base currency
• Mini lot: 10,000 units
• Micro lot: 1,000 units

Larger lots increase both the required margin and the monetary value of each pip movement.

Example:

• Target position: CAD 10,000
• Available leverage: 30:1
  Required margin = 10,000 / 30 ≈ CAD 333

Another example:

• One mini lot of EUR/USD, notional ≈ CAD 13,500
• Leverage: 30:1
  Required margin ≈ 13,500 / 30 = CAD 450

Profit and loss are always calculated on the notional value. A 50-pip move in favor on a CAD 13,500 position affects the full CAD 13,500 exposure, not just the CAD 450 margin. The same applies to adverse moves.

When a client opens a leveraged position, several steps are involved:

• Select the instrument (for example, EUR/USD, an index CFD or a commodity).
• Define trade size in lots or contracts. This determines the notional value.
• The platform shows the margin requirement based on the relevant leverage for that instrument and account.
• Choose the order type: market (immediate execution) or pending (limit at a chosen price).
• Optionally add a stop-loss to limit downside and a take-profit to lock in gains.
• Confirm the trade. Margin is then reserved, and open profit or loss starts to update in real time.

Account equity equals account balance plus or minus the unrealized result on open positions. Used margin, free margin and equity are key indicators to watch while trading with leverage.

Leverage acts as a multiplier on the account's sensitivity to price changes. The higher the leverage, the larger the impact of small market moves on equity.

Example:

• Position size: CAD 15,000
• Margin posted: CAD 500
• Effective leverage: 30:1

If the market moves 1% in favor:

• Profit ≈ CAD 150 on a CAD 500 margin
• Percentage gain relative to margin: about 30%

If the market moves 1% against:

• Loss ≈ CAD 150
• Around 30% of the margin deposit is lost

Losses can extend beyond the initial margin if price continues to move unfavourably and there is additional free equity in the account. High leverage therefore increases the risk of rapid drawdowns.

The platform continuously monitors whether equity is sufficient to support open positions. Two key points apply:

• Margin call: if equity falls below a specified maintenance margin level, the client may receive a notification to add funds or reduce exposure.
• Liquidation (stop-out): if equity drops to a critical level defined by the provider's margin policy, some or all open positions may be closed automatically to prevent the balance from moving deeply negative.

To reduce the likelihood of margin calls and liquidation:

• Use stop-loss orders to cap losses on individual trades.
• Avoid concentrating a large share of equity in a single position.
• Keep some free margin as a buffer against normal market volatility.

For retail clients in Canada, leverage on forex and CFD products is constrained by local regulatory settings. Forex and CFD providers are subject to provincial rules, coordinated nationally, and investment dealers are typically supervised by a self-regulatory body.

As a consequence:

• Maximum leverage for major forex pairs often does not exceed ratios like 30:1.
• Indices, commodities and other volatile products may have lower maximum leverage.
• Margin requirement tables by instrument, including percentage margin and implied maximum leverage, are usually made available in the account area and on the provider's website.

Clients remain responsible for checking the current margin requirement for each instrument before opening a position, as these parameters can differ by asset class and account type.

Leverage is not uniform across all markets. It usually reflects the usual volatility and liquidity of each asset class.

*Exact ratios depend on the specific instrument and account conditions for Canadian clients.

When selecting a symbol on the platform, the applicable margin and leverage information is normally displayed before order confirmation.

Maximum leverage is the upper limit allowed on a product. Real, or effective, leverage shows how aggressively the account is actually used.

Real leverage formula:

• Real leverage = Total notional value of all open positions / Account equity

Example:

• Equity: CAD 5,000
• Combined position value: CAD 50,000
  Real leverage = 50,000 / 5,000 = 10:1

Even if the account allows up to 30:1, the client in this example is effectively using 10:1. Many traders choose to keep real leverage well below the maximum to reduce the risk of sharp equity swings.

Leverage itself is not charged as a separate fee, but using leveraged products usually involves:

• Spreads: the difference between bid and ask, applied when opening and closing trades.
• Commissions: on certain account types, a commission per lot or per contract may apply.
• Swap or rollover: holding a forex or CFD position overnight can result in a credit or charge, depending on interest rate differentials or the cost of maintaining the exposure.

Swap rates are expressed per instrument and can be checked in the contract specifications section of the platform. For longer holding periods, these financing costs may become significant and should be included in the overall trading plan.

Several simple rules can help keep leverage risk within acceptable limits:

• Start with modest leverage such as 5:1 or 10:1 while building experience.
• Risk only a small share of account equity per trade, for example 1% to 2%.
• Always define an exit level with a stop-loss when opening a new position.
• Check used margin, free margin and equity regularly, especially during periods of high volatility.
• Consider practicing on a demo account to test position sizing, margins and stop placements without financial risk.

Leverage should be seen as a technical tool that changes the scale of market exposure. It does not replace the need for a structured trading approach, clear risk limits and an understanding of how margin and equity interact in real time.