What is the primary purpose of leverage in FGX trading?

In trading, leverage is a crucial concept that allows traders to control larger positions than they could with their own capital alone. The primary purpose of leverage in FGX trading is indeed to enable traders to amplify their purchasing power, giving them the ability to take on larger market positions with a smaller amount of invested capital. This mechanism opens up the opportunity for potentially higher returns, as even a small market movement can lead to significant gains on the invested amount.

Using leverage effectively is fundamental to trading strategies, especially in markets where individuals may not have extensive capital to invest. While it can enhance the potential for profits, it is important to remember that it also increases risk. A trader can incur substantial losses that exceed the initial capital invested. Understanding how leverage works and the associated risks is essential for effective trading within the FGX environment.