Golden Tips: When to Avoid Using Leverage? ⚠️
1. During Crazy Volatility:
- If the market swings +5% every hour (like news of war or interest rates) → leverage turns volatility into catastrophic losses!
2. Before Major News Releases:
- Such as U.S. Non-Farm Payroll (NFP) reports or central bank decisions → the direction is unclear, and leverage can liquidate your account in minutes!
3. If You Are a Beginner:
- Leverage requires experience in risk management → start with 1x-2x leverage until you master technical and fundamental analysis.
4. In Case of Low Liquidity:
- In currencies or low-trading assets (like some altcoins) → difficulty in closing the trade at the desired price!
5. If You Don't Have a Plan:
- Leverage is not for random betting! Without a stop-loss or profit target → you are putting yourself in a financial Russian roulette.
6. When Portfolio Concentration is High:
- If 80% of your capital is in one trade → leverage will multiply the risk to the point of collapse!
7. If You Are Under Psychological Pressure:
- Fear or greed alters your decisions → leverage will amplify your emotional mistakes.
8. When Using High Leverage (50x+):
- Even if you are a professional → the market could move 2% against you and liquidate all your capital!
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Practical Example:
- You anticipated a rise in #Bitcoin and used 50x leverage.
- The price dropped only 1.5% → you lost 75% of your capital! 💥
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Reminder: Leverage is a sharp knife.. use it only when:
- The market is stable.
- You have a clear plan.
- You manage risks with a stop-loss.
