Higher leverage isn't the path to higher returns — there's a peak, and past it your long-term return goes down. These calculators show you exactly where that peak is for your account, your win rate, and your risk per trade.
When you open a leveraged trade, you don't pay the full position size. You lock a margin deposit as collateral. The broker funds the rest.
Example: You want to control €125,000 of EUR/USD on a €25,000 account.
If the trade moves against you, losses come from your free margin. Once your free margin hits zero, the broker auto-closes the position (margin call).
The trap: at 30:1 leverage, a 3.33% adverse move wipes out your account. EUR/USD has moved 3.33% in a single day during NFP releases, Brexit night, the SNB un-peg, and COVID March 2020.
The Kelly criterion (1956, Bell Labs) proved that for any bet with edge, there is an optimal fraction of capital that maximizes long-term geometric growth. Above this fraction, returns DECREASE.
Concrete: a trader with 55% win rate and 1:1 R:R has Kelly = 10%. At 2× Kelly (20% risk per trade) they have 50% probability of a 50% drawdown. At 3× Kelly, ruin is near-certain even though every trade has positive edge.
ESMA capped retail leverage at 30:1 because at uncapped brokers (50-500:1), 89% of retail accounts lost money. With the 30:1 cap, that dropped to ~76%. Still bad, but better. The cap isn't protecting you from edge — it's protecting you from yourself.
ESMA-disclosed: 76-86% of retail CFD/FX accounts lose money. The 14-24% that don't mostly cluster around 5-15% annual. If your tool promises >30% annual, you're being lied to.