Leverage
A mechanism that lets you control a position larger than your available capital, amplifying both potential profits and potential losses.
Leverage is the ability to move a position larger than your capital alone would allow. With 1:100 leverage, for example, with 100 you control a position equivalent to 10,000.
The appeal is obvious: it amplifies profits. The risk, however, is symmetrical — it amplifies losses in the same proportion. A small move against your position can eat up a large slice (or all) of the deposited capital. That is why leverage is, at the same time, the most powerful and the most dangerous tool for the beginner trader.
Using leverage without risk management is the main cause of wiped-out accounts. The basic protections are: set a stop loss on every trade, risk only a small percentage of capital per trade (usually 1% to 2%) and avoid opening positions that are too large on impulse.
In short: leverage is neither good nor bad — it is a multiplier. What decides the outcome is the risk discipline of whoever uses it.