Leverage Trading
Trading with borrowed funds to amplify potential gains (and losses) beyond your initial investment.
Explained Simply
Leverage allows you to control a larger position than your capital allows. At 10x leverage, $1,000 controls a $10,000 position. If the price rises 5%, you gain 50% on your capital. But if it drops 5%, you lose 50% — and at 10%, you are liquidated (lose everything). Leverage trading in crypto is extremely risky due to high volatility. Most beginner losses come from overleveraging. Many countries restrict leverage for retail traders. Never use leverage you do not fully understand.
Example
With 5x leverage and $1,000 margin, you open a $5,000 Bitcoin long position. A 20% price drop liquidates your entire $1,000.
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This content is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult a qualified professional for advice specific to your situation.