Leverage is one of the most powerful tools in proprietary (prop) trading, allowing traders to control larger positions in the market with relatively small capital. At Pax Market Funds, leverage plays a central role in helping traders maximize opportunities without risking their personal savings. In simple terms, leverage acts as a multiplier—if a trader has access to a $25,000 funded account with 1:100 leverage, they can trade positions worth up to $2.5 million. This can turn even small market movements into significant gains.
However, while leverage can boost profits, it also magnifies risks. That’s why prop firms like Pax Market Funds implement strict risk management rules, including maximum drawdowns, daily loss limits, and position sizing guidelines. These rules protect both the trader and the firm’s capital. For example, a 1% move against your position can cause a major loss if risk is not controlled.
Leverage benefits traders by enabling them to diversify strategies, scale up trades, and access markets like forex, commodities, indices, and crypto. But success comes only with discipline. Using stop-loss orders, risking only 1–2% per trade, and practicing strong risk management ensures that leverage works as a tool for growth rather than a path to heavy losses.
At Pax Market Funds, leverage is designed not just to amplify trades—but to give traders the professional edge they need to compete in global markets responsibly.