<p>Tier 1 leverage ratio, often simply referred to as leverage, is a critical aspect of trading that allows traders to control larger positions than their initial investment. It's a double-edged sword, amplifying both potential profits and losses.</p>

<h2>How It Works</h2>
<p>Leverage is expressed as a ratio, such as 1:100 or 1:500. This means for every dollar (or other currency) you deposit, you can control $100 or $500 worth of an asset. Here's how it works:</p>
<ul>
  <li><strong>Initial Margin</strong>: This is the minimum amount you need to deposit to open a position. It's calculated as the total position size divided by the leverage ratio.</li>
  <li><strong>Maintenance Margin</strong>: This is the minimum amount you need to maintain in your account to keep your position open. It's usually lower than the initial margin.</li>
  <li><strong>Margin Call</strong>: If your account equity falls below the maintenance margin, you'll receive a margin call. This means you need to deposit more funds or close some positions to bring your equity back above the maintenance margin.</li>
</ul>
<p>For instance, with a 1:100 leverage, a $1000 deposit lets you open a $100,000 position. If the price moves against you by 1%, you'd lose $1000, and you'd receive a margin call.</p>

<h2>Why It Matters for Traders</h2>
<p>Leverage matters for several reasons:</p>
<ul>
  <li><strong>Leverage amplifies profits</strong>: If you're right about the market direction, leverage can significantly increase your profits.</li>
  <li><strong>Leverage amplifies losses</strong>: Conversely, if you're wrong, leverage can quickly wipe out your account.</li>
  <li><strong>Leverage affects risk management</strong>: It's crucial to understand that leverage increases your risk. You need to manage your risk accordingly, using stop-loss orders and position sizing.</li>
</ul>

<h2>Example</h2>
<p>Let's say you deposit $1000 with STB Provider, which offers up to 1:300 leverage. You decide to use 1:100 leverage to open a long position on EUR/USD:</p>
<ul>
  <li>Initial margin: $1000 / 100 = $10</li>
  <li>Position size: $1000 * 100 = $100,000</li>
  <li>If EUR/USD moves against you by 0.1%, you'd lose $100 (0.1% of $100,000).</li>
</ul>

<h2>Key Takeaways</h2>
<ul>
  <li>Leverage amplifies both profits and losses.</li>
  <li>Higher leverage means higher risk.</li>
  <li>Understand and manage your risk when using leverage.</li>
  <li>STB Provider offers up to 1:300 leverage on MetaTrader 5.</li>
</ul>