Leverage allows you to trade with money that you don’t have. Without going into the actual reality of this when it comes to spot FOREX: in effect the broker is “lending” you the money (the difference required).
In other words:
At 1:1 leverage or 0% (no leverage) if the margin requirement to open a certain position would be $10 000 then you would need $10 000 in order to open that position.
At 10:1 leverage or 10%: you would only need $1 000 to open the same position described above. But here’s the problem: because of leverage you are now able to open a FAR larger position. So the amount of money that you are going to make or lose is amplified proportionately. So inevitably what happens is that new traders take far larger positions that they should, simply because they can, and will always blow up their accounts and obviously lose their capital.
Best advice and practice: go for an ABSOLUTE MAXIMUM 30:1 or 3.33% leverage and you will not be sorry in the long run (and 10:1 or 10% is even better) (and NO leverage is first prize).
Problem with the above of course: you need a LOT more capital. And therein lies the secret i.e. if you don’t have enough capital to trade with little to no leverage then walk away until you do have enough. It’s really that simple.
The reason your margin requirement is constantly changing is simply because price is changing.
In the hands of a seasoned professional trader leverage is not an issue (but this being said a seasoned professional trade will not trade with high leverage to begin with).