Answer: It allows control of large capital with small funds.
Leverage:
👉 Expands position size
Small capital:
👉 Controls large amount
■ Essence
Leverage amplifies financial exposure.
How Does It Work?
Answer: It multiplies trading capacity.
Example:
👉 Capital: 100,000 yen
👉 Trade: 1,000,000 yen
This is:
👉 10× leverage
■ Essence
Leverage increases the size of transactions.
How Does It Affect Profits?
Answer: It magnifies gains.
If:
👉 Position = 1,000,000 yen
👉 Movement = 1%
Then:
👉 Profit = 10,000 yen
Relative to capital:
👉 10% gain
■ Essence
Small price changes create large returns.
What Are the Risks?
Answer: Losses are also magnified.
If price moves:
👉 Opposite direction
Then:
👉 Loss increases rapidly
Risk:
👉 High
■ Essence
Leverage amplifies both gain and loss equally.
What Is Stop-Loss?
Answer: Automatic loss control.
When loss exceeds limit:
👉 Position is closed
Purpose:
👉 Prevent large losses
■ Essence
Stop-loss limits downside risk.
● Conclusion
Answer: Leverage increases both opportunity and danger.
It allows:
👉 Large trades with small capital
But:
👉 Losses can grow quickly
■ Essence
Leverage is power with risk.
👉 In essence, leverage does not change the market—it changes how strongly the market affects you.