What leverage actually is
Leverage lets you control a position larger than the money you put up. At 1:100, $1,000 of margin controls a $100,000 position. The market does not know or care how much margin you posted; it moves the full $100,000.
Why the direction matters less than people think
A 1% move against a $100,000 position is a $1,000 loss, which is all of the margin in the example above. A 1% move in your favour is a $1,000 gain. The asymmetry is not in the market. It is in what a total loss does to your ability to trade tomorrow.
Margin, margin call and stop-out
Margin is the deposit held against an open position. If losses reduce your equity to the margin-call level, the platform warns you. At the stop-out level it begins closing positions, largest loss first, to protect the account from going below zero. Levels differ by account and are on the accounts page.
Available leverage is not recommended leverage
A 1:500 account does not mean you should use 1:500. The number describes the maximum the platform will allow, not what is sensible. Most experienced traders use a fraction of the available leverage and treat the rest as a buffer against margin calls.
A sensible way to think about it
Decide the most you are prepared to lose on a trade in money, not pips. Work backwards from that to the position size given where your stop is. The leverage the account offers becomes almost irrelevant; the position size is what you actually chose.
At Arabian Markets
Maximum leverage is 1:200 on Basic and 1:500 on Standard, Platinum and Premium. Basic is capped deliberately as a first account. Margin-call and stop-out levels for each account are on the accounts page.
