In the world of futures contracts, leverage is a powerful tool…
You could double your profits 🔥 or wipe out your entire account 💀
Let’s understand it simply with real examples:
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🔍 What is leverage?
Simply:
It is a tool that allows you to control a large amount using a small capital.
✅ A simplified example:
If you only have $100,
And using 10x leverage,
You become able to trade as if you own $1,000!
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⚖️ How does it work?
• Leverage 5x → Every $1 equals $5
• Leverage 10x → Every $1 equals $10
• Leverage 20x → Every $1 equals $20 … and so on
The higher the leverage, the higher the profit percentage, and also the higher the risk.
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💥 Practical example:
You entered a BTC buy trade at 60,000
And I used 10x leverage with a balance of $100
It means the trade size = $1,000
✅ If the price increases by 5%
→ Achieve a profit of $50 (meaning +50% on your balance!)
❌ But if the price drops by 5%
→ The trade gets liquidated and you lose everything!
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⚠️ When will you be liquidated?
Liquidation occurs when your account loses enough to cover the margin
The higher the leverage, the closer you are to liquidation
Leverage Loss leads to liquidation almost
2x -50%
5x -20%
10x -10%
20x -5%
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🧠 Very important tips for beginners:
✅ Don't start with high leverage (use 2x or 3x only at the beginning)
✅ Always set a Stop Loss to protect your capital
✅ Understanding the market is more important than taking risks
✅ Don't risk all your capital in one trade