KnowTheLimits

📈 What is Margin Trading?

Margin trading means borrowing money from a broker to trade larger positions than your own capital allows.

You’re using leverage to multiply potential profits — but also potential losses.

💡 Basic Concept:

You invest some of your own money (called margin).

You borrow the rest from the broker.

If the trade goes well ✅, you keep the profit.

If it goes badly ❌, you may lose more than your initial investment.

🧠 Example:

You have $100.

You trade with 10x leverage → Total position: $1,000.

If the price moves +5%, you gain $50 (50% profit).

If the price moves -5%, you lose $50 (50% loss).

🚨 Risk Alert:

If the trade goes too far against you, the broker may issue a margin call (asking for more funds) or liquidate your position to cover losses.

✅ Pros:

Amplifies gains #HighReward

Trade larger positions #LeveragePower

❌ Cons:

Amplifies losses #HighRisk

You can lose more than you put in #MarginCall

📊 Common Leverage Ratios:

2x, 5x, 10x, sometimes even 100x (⚠️ very risky)

🔐 Tips for Beginners:

Start small #PracticeSafeTrading

Use stop-loss orders #RiskManagement

Never trade more than you can afford to lose #TradeResponsibly

Understand liquidation levels #KnowTheLimits
#BeginnersGuide