Avoid trading with leverage before it destroys your portfolio
Many traders believe that leverage is a shortcut to quick wealth, but it is actually one of the fastest ways to lose everything. Let's simplify the reality of leveraged trading.
What is leveraged trading?
Leverage allows you to borrow money from an exchange to trade with more capital than you actually have.
Example: With just $100 and 10x leverage, you control a position worth $1,000.
Does this sound strong? Here’s the risk...
The hidden risk of leverage
A small move in the wrong direction can destroy your entire account. This is called liquidation.
In spot trading, the value of your assets can drop by 90% and then recover.
With leverage, even a -5% drop can lead to the liquidation of your position.
No room for waiting - once liquidated, you will lose your money.
Better strategy: Gradual growth, strong growth
The true path to wealth in trading is as follows:
$100 → $1,000 → $10,000 → $100,000 → $1,000,000 → $10,000,000
It takes time, discipline, and smart decision-making.
5 essential habits for long-term trading success:
1. Start with small steps - prioritize learning over profits in the beginning.
2. Avoid leverage - especially if you are still gaining experience.
3. Use stop-loss orders - protect yourself from significant losses.
4. Take profits regularly - don't be greedy. Preserve your gains.
5. Study daily - learn market patterns, price movements, and news.
In summary:
Leverage is not necessary for success. What you really need is patience, discipline, and perseverance.
Grow your account gradually. Protect your capital. Trade wisely.