Simply put, leverage allows traders to trade on a large investment size, without having to put up the full amount.
This means that a small account balance can control a much larger total contract value.
For example where leverage is 1:100, it means that for every $1 invested in the market, the broker invests $100 for you. So, with a deposit of just $100, the trader can access $10,000.
Leverage makes a trader with a small investment size have the same potential as a trader with a much bigger investment size.
The maximum leverage offered by brokers are different from 1:5 to 1:5000.