Leverage in Forex allows traders to control a larger position size with a smaller amount of capital. While it can amplify profits, it also increases the potential for losses. It’s essential to use leverage cautiously and understand the associated risks.

Effective risk management in Forex involves setting stop-loss orders, diversifying your portfolio, using proper position sizing, and not risking more than you can afford to lose. Additionally, having a well-defined trading strategy and staying informed about market events are crucial for managing risk.

Holding positions overnight exposes traders to swap or rollover rates, which can be either positive or negative. These rates are determined by the interest rate differential between the two currencies being traded. Positive swaps can add to profits, while negative swaps can increase trading costs, making it essential to factor them into your risk management strategy.