Leverage is a loan from your broker that amplifies your trading position. With 1:100 leverage, $1,000 of your own money controls $100,000 of currency. You still make and lose based on the full $100,000 position, not just your $1,000 — so a 1% move can double your money or wipe it out.
Retail leverage is capped by regulators in most tier-1 jurisdictions: the FCA and ESMA cap retail forex at 1:30 on majors, ASIC at 1:30, the CFTC at 1:50. Offshore entities (Seychelles, Saint Vincent, Vanuatu) commonly offer 1:500 to 1:2000 — which is why many active retail traders choose offshore broker entities despite the weaker regulatory protection.
Higher leverage is not automatically better. It simply multiplies outcomes. A disciplined trader can make the same return on 1:30 as on 1:500 by using more margin — and will blow up less often because the margin call happens further away from their entry.