How works leverage ?

It’s a simple concept.
If you have $10,000 to trade with, your forex broker will let you borrow money
from him so that you can trade in larger quantities. They will let you borrow as much as 400 times (400:1) what you put up in a trade. Most brokers allow
between 50:1 and 100:1 margin. So, if you put up $1,000, and your broker
allows 100:1 margin, then you’ll be trading $100,000 worth of currency (instead
of $1,000).