What is leverage in trading and why can it leave you bankrupt? 🔥💲
Leverage is like borrowing money from the market to trade with more than you actually have. 💲💲💲
If you have $10 and use 10x leverage, you can trade as if you had $100. 🕹️
If the price goes up by 1%, you gain as if you had invested $100. 💲✨
But if the price goes down by 1%... you lose your $10 and get kicked out of the game. Goodbye, thanks for participating. 🥲🔥
This is called liquidation: when you no longer have margin to withstand the loss and the system automatically closes your trade. ⚠️
Leverage multiplies profits, yes... but also losses. It's like running in sandals on the highway: it might go well, but the odds are not in your favor. ⚠️⚠️
Direct advice: 🫣👋🏻
If you're just starting, better not to even look at it. First, strategy, emotional control, and risk management. Then we can talk about multiplying.