Many  beginning  traders  don't fully understand the concept  of leverage.  Basically,  if you  have a start  up  trading  capital  of  $5,000 and  if  you  trade  on  a  1:50 margin you  can effectively  control a capital of $250,000.  However, a two percent  move  against you and your trading  capital  is completely wiped out. If you are a  beginning  forex trader  you  should not use more than 1:20margin.