How much forex leverage? The legal caps and the 2% problem

UXS video · Forex · 0:49 · Published

UXS video · synthetic voice · Mixkit music · MP4, 7.1 MB

What this video covers

US and EU retail leverage caps side by side, and the arithmetic of why a 2% move wipes out margin at 50:1. The point: position size and stops control risk, not the broker’s maximum.

Sources and the longer explanation: How Much Leverage Should I Use in Forex?.

Numbers shown on screen

  • US, major pairs: 50:1
  • EU, major pairs: 30:1
  • US, other pairs: 20:1
  • EU, non-majors: 20:1

How the visuals were made

In 0:49 the video moves through 7 scenes, including a bar chart, “Maximum retail leverage”; a worked formula card (2% move × 50 = 100% of margin); a checklist, “What actually controls risk”; a worked formula card (1 ÷ 2% = 50:1 · 1 ÷ 5% = 20:1); a checklist, “Size first, leverage second”. All graphics were rendered frame by frame by UXS; no stock footage, logos or faces are used.

Chapters

  • 0:00 Maximum retail leverage
  • 0:09 Why 50:1 is fragile
  • 0:15 1:500 offshore? No such protections
  • 0:19 What actually controls risk
  • 0:25 Margin and leverage are two sides of one rule
  • 0:36 Size first, leverage second
  • 0:44 Risk note

Transcript

US rules cap retail forex leverage at 50:1 on major pairs and 20:1 on others. The EU caps majors at 30:1.

At 50:1, a 2% move against you wipes out 100% of your margin.

Offshore offers of 1:500 or more come without these protections.

So control risk with position size and a stop-loss, not with the broker's maximum.

Those limits come from margin rules. US dealers must collect at least 2% of notional on majors and 5% on other pairs, which equals 50:1 and 20:1.

A practical check: decide your dollar risk first, set the stop, calculate the size, and if the implied leverage is above 10:1, reconsider.

Educational only, not financial advice.