In finance, leverage is the ratio of credit to equity when making an investment. Leverage allows you to make large investments, even if your equity is relatively small.
Forex leverage means buying, with the help of credit, larger amounts of currency than your equity allows. This means that when you trade in forex using leverage, you can expect to make greater profits, or losses.
For example, if you buy a certain currency with 10:1 leverage, any profits or losses incurred by trading back the currency will be ten times more than your equity alone would have generated.
Like any credit-based investment, leverage elevates your financial risk, and in the case of forex, the risk from speculative trading. However, it can also drastically increase the potential profits.