Leverage is simple. Your broker can offer you 2x, 4x 10x etc. leverage. Example;

- If you have $10,000, 4x leverage will enable you to trade with $40,000.

In this example you could make 4x the profits you normally would. Great eh? Wait a sec...

This also means you could lose money 4x as fast as you normally would! For this reason it is hard to recommend using leverage because it really does depend on what financial situation you are in. I can imagine many traders taking up the option of leverage due the basic human emotion of greed! It is worth remembering, leverage is only good if you are making profits!

Leverage is good for people with a small starting capital as it can help them get off the ground quickly. It also allows reasonably poor people to obtain profits they never thought were possible. However it is worth choosing a broker that doesn't allow you to lose more than you started with, as this could be financially disastrous!

Brokerage accounts typically offer you 1-4x leverage.
Spread betting accounts typically offer you 10x leverage.
FOREX accounts can offer you up to 400x leverage!

Using leverage when trading is worth thinking about if you are going to be trading full-time for a living, can prove you can make regular profits through practice trading and have a starting capital of $50,000 or less.