Understanding Leverage and Margin in Forex Trading

Leverage is one of the most powerful — and most misunderstood — aspects of forex trading. Used correctly, it allows traders with small accounts to control significant positions. Used recklessly, it magnifies losses just as much as it magnifies gains.

What Is Leverage?

Leverage is a loan provided by Bevona Trade that allows you to control a position larger than your account balance. A leverage of 1:100 means that for every $1 in your account, you can control $100 in the market. Bevona Trade offers leverage up to 1:500 on forex pairs.

What Is Margin?

Margin is the amount of your own money held as a deposit to open a leveraged position. It is not a fee — it is collateral. If you use 1:100 leverage to open a $10,000 EUR/USD position, your required margin is $100 (1% of $10,000).

Free Margin and Margin Level

• Used Margin — Total collateral locked in open positions.
• Free Margin — Equity minus Used Margin. This is the capital available to open new trades.
• Margin Level — (Equity ÷ Used Margin) × 100%. A healthy margin level is above 200%.

What Is a Margin Call?

When your Margin Level drops to a critical level (typically 100% on Bevona Trade), you receive a Margin Call — a notification warning you to deposit more funds or close positions. If margin level drops further (to the Stop Out level, typically 50%), the platform will automatically close your largest losing positions to protect your remaining balance.

Using Leverage Responsibly

• Start with low leverage (1:10 or 1:20) until you are consistently profitable
• Always use a stop-loss — leverage amplifies losses without one
• Never use your entire account balance as margin on a single trade
• Keep your Margin Level above 300% at all times for safety