Leverage allows a large trade position to be initiated with a small margin deposit. The amount of leverage available to a trader varies, with magnification of up to 400:1
For example 100:1, meaning that currency trades worth $100,000 can be made with a margin deposit of $1,000. Leverage allows the use of credit to trade amounts larger than your deposit.
Remember, the higher the leverage the higher the risk of losing your deposited capital. Leverage can work both for you as well as against you.