What is the role of leverage in Forex trading, and how does it affect risk?
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Leverage in forex trading allows traders to control larger positions with less capital, amplifying potential profits but also significantly increasing risk; careful risk management strategies are essential to mitigate the dangers of using high leverage, as small market movements can lead to substantial losses.
In Forex trading, leverage enables traders to maximize exposure with minimal capital, heightening both profit potential and the risk of large losses due to small market fluctuations.