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What is leverage adjustment in forex?

Leverage adjustment refers to changing the amount of borrowed capital relative to account equity. Regulators in regions such as the EU, UK, and Australia limit retail leverage to 1:30, while offshore brokers may offer up to 1:500 or more. Adjusting leverage allows traders to balance profit potential and risk. Lower leverage reduces exposure and drawdown risk, while higher leverage amplifies both profits and losses. Many brokers allow clients to select leverage levels in their account settings. Wise traders use leverage conservatively, adjusting it based on account size, experience, and strategy rather than chasing higher returns.