What Is Leverage in Forex Trading?
Leverage allows you to control a large position in the market with a relatively small amount of capital. With XM leverage up to 1:888, you can control $88,800 worth of currency with just $100 in your account. This amplifies both your potential profits and your potential losses.
Think of leverage like a loan from your broker. XM lends you the extra capital to open larger positions. You only need to put up a small percentage of the total trade value — this is called margin.
Leverage Formula
Leverage = Total Position Size ÷ Margin Required
Example: 1:100 leverage = $10,000 position with $100 margin
XM Leverage Options by Asset Class
XM offers different maximum leverage levels depending on the instrument you're trading. Here's the full breakdown:
| Asset Class | Max Leverage | Margin Required | Example |
|---|---|---|---|
| Forex Major Pairs | 1:888 | 0.11% | $100 controls $88,800 |
| Forex Minor Pairs | 1:500 | 0.20% | $100 controls $50,000 |
| Gold (XAUUSD) | 1:200 | 0.50% | $100 controls $20,000 |
| Silver (XAGUSD) | 1:200 | 0.50% | $100 controls $20,000 |
| Oil (WTI/Brent) | 1:66 | 1.50% | $100 controls $6,600 |
| Stock CFDs | 1:20 | 5.00% | $100 controls $2,000 |
| Equity Indices | 1:100 | 1.00% | $100 controls $10,000 |
| Crypto CFDs | 1:2 | 50.00% | $100 controls $200 |
How XM Leverage Works: Real Examples
Winning Trade Example
Losing Trade Example
How to Calculate Margin on XM
Margin is the amount of money XM requires you to have in your account to open and maintain a leveraged position. Here's the formula:
Margin Formula
Required Margin = (Trade Size × Current Price) ÷ Leverage
Example: 1 lot EURUSD (100,000 units) at 1.0850 with 1:100 leverage
= (100,000 × 1.0850) ÷ 100 = $1,085 margin required
Using XM Leverage Responsibly: Risk Management Rules
High leverage is a double-edged sword. Here are the golden rules for using XM leverage safely:
Never risk more than 1–2% per trade
Even with 1:888 leverage, limit each trade's risk to 1–2% of your account balance. This keeps you in the game even after a losing streak.
Always use Stop Loss orders
Set a stop loss on every trade. Without a stop loss, a single bad trade can wipe out your entire account when using high leverage.
Start with lower leverage
Beginners should start with 1:10 or 1:20 leverage. You don't need 1:888 to make good returns — lower leverage means lower risk.
Practice on XM Demo first
Use an XM demo account to practice with leverage before risking real money. Get comfortable with how margin calls work.
Use XM's margin calculator
XM provides a free margin calculator on their website. Always calculate your required margin before opening a position.
XM Negative Balance Protection
XM offers negative balance protection on all retail accounts. This means you can never lose more than your deposited funds — even in extreme market conditions. If your account balance goes negative due to a market gap or extreme volatility, XM will reset it to zero at no cost to you.
You Are Protected
XM's negative balance protection ensures your maximum loss is limited to your deposited amount. You will never owe XM money beyond what you deposited.
How to Change Your Leverage on XM
Log in to your XM Members Area (my.xm.com)
Go to 'My Accounts' and find the account you want to change
Click the settings icon next to your account
Select 'Change Leverage' from the dropdown menu
Choose your desired leverage level (up to 1:888 for forex majors)
Confirm the change — it takes effect immediately
Start Trading with XM Leverage
Open a free XM demo account to practice using leverage risk-free, or open a live account with just $5.