Leverage 1:1000, features of use and brokers providing it

Forex trading has become popular primarily due to the ability to use broker leverage.

Leverage has made trading more accessible and reduced collateral requirements for opening trades, thereby allowing even small investors to enter the market.

Every year, the amount of leverage provided only increases, and while previously it was difficult to find a broker with a leverage of more than 1:100, now quite a few brokers offer leverage of 1:1000 or more.

In stock trading, the 1:1000 size is used for scalping on M1, but in addition to the strategy itself, there are many other features.

First of all, not all brokerage companies offer 1:1000 leverage, and if they do, it's only on certain accounts:

Finding a broker with high leverage is most difficult if you want to trade on an ECN account , but such companies do exist. The minimum deposit required to open an account depends on the account type.

Another important point is the asset you plan to trade; the maximum leverage is provided for currency pairs and will have to be used for short-term trading.

For other assets on the same account, the leverage may be significantly lower, for example, for cryptocurrencies 1:50, for futures 1:100, and for securities 1:25.

Using a leverage of 1:1000 implies that the margin amount for the transaction will be 0.001%, that is, in order to open a transaction of 1 lot (100,000) euros at a price of 1.1 dollars per euro, you will need to:

110,000 x 0.001 = 110 US dollars

In this case, one point in a five-digit quote will be equal to $1, and a price change of 110 points will lead to a complete loss of the collateral.

For this reason, trading with 1:1000 leverage is associated with high risk and is only possible on the shortest time frames.

Is there any point in using such high leverage? In my opinion, no. Besides the fact that such trading is spontaneous and limits the choice of trading accounts, 1:500 leverage is quite sufficient for scalping.