Leverage increases the power of the trade and its potential profits.
• But it also increases the risk, because if the market moves against you by a small percentage, you could lose all your capital or the trade could be liquidated.
Practical example:
You bought a Bitcoin contract for $100 with 10x leverage:
• If the price rises by 5%, your profit would be approximately $50.
• If the price falls by 5%, the trade will be liquidated and you may lose your entire $100
