Margin requirement

To recap then, the major difference is that the margin requirement is set by your broker, which determines your maximum leverage. How much of that available leverage you use in your trades is entirely your choice. Your broker does not set your leverage. They just set the maximum that you can use. A responsible trader generally never has to worry about this, as the leverage s/he uses is far below the maximum allowed by the broker. Whether a broker’s marketing guys offer you “400:1 leverage” or “50:1 leverage” should not generally make any difference. Let’s see first how to calculate leverage, and then why responsible traders never over-use it.