How leverage works
At 1:100 leverage, a $1,000 deposit controls a $100,000 notional position (1 standard lot on a USD pair). A 1% adverse move costs $1,000 — the entire deposit. At 1:30, the same move costs $333.
Leverage and EA strategy type
Higher leverage does not mean higher return for EAs — it means higher margin efficiency. A well-designed EA uses only the leverage it needs for its position sizing. Trend-following EAs on H4/D1 typically function well at 1:30. Scalpers on M1/M5 may require 1:200+ for the same lot size to avoid margin errors.
Regulatory limits
ESMA (EU/UK) caps retail leverage at 1:30 for major FX pairs. Offshore brokers offer up to 1:2000. Higher leverage is not safer — it transfers risk management responsibility entirely to the EA stop-loss logic.