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Leverage is a term used to describe the difference between what is in your account, and what is available for trading. In Forex trading, leverage is essential as price fluctuations are only a fraction of a cent. If you have a leverage ratio of 200 to 1, that means you can trade $200 for every $1 that is in your account. The high leverage available in Forex trading is why it is so exciting, and so potentially rewarding.