The reason concerning for what reason is on the grounds that most forex traders are undercapitalized in regard to the size of the exchanges that they are making. To give a basic model, at a 1:100 leverage, it takes merely a - 1% change in the price to result in a total loss. This loss figures out how to reduce the total account equalization and increases the leverage ratio considerably more. Likewise, leverage is additionally known for increasing the transaction costs, implying that the estimation of the account abruptly drops.