How does leveraging work in Forex Trading?

At Pivex, traders use leverage to control larger positions in the market using a smaller amount of simulated capital. It’s a common feature in forex and CFD trading that allows you to amplify both potential profits and potential losses.

What is Leverage?

Leverage lets you trade bigger positions than your available margin. For example, with 30:1 leverage, you only need $1,000 of margin to control a $30,000 position. The higher the leverage, the more market exposure you get — but with more risk.

Example:

If you’re trading EUR/USD and want to open a position worth $120,000, with 30:1 leverage, you only need to allocate $4,000 in margin.

Why It Matters at Pivex:

Although Pivex provides simulated capital, your ability to manage leverage responsibly is a key part of your evaluation. Leverage can help you grow your profits, but it can also lead to fast drawdowns if used carelessly. That’s why smart risk management is essential.

Things to Watch For:

• Bigger leverage = bigger risk: A small move against your position can wipe out your margin.
• Drawdown limits apply: At Pivex, daily and overall drawdown rules are based on your account’s starting balance, so overleveraging can lead to violations quickly.
• No margin calls, but risk still matters: Since this is a simulated environment, you won’t get a margin call, but hitting drawdown limits will fail your account.

Tips for Responsible Use of Leverage:
• Use smaller lot sizes and avoid risking more than 1–2% per trade.
• Always use stop-loss orders to protect your account.
• Don’t open oversized positions just because leverage allows it — your goal is consistency, not lucky wins.

In short, leverage gives you power — but it must be handled with care. At Pivex, we’re looking for traders who use leverage wisely and manage risk with discipline.