Leverage in Currency Trading: Doubling Opportunities with Caution
Leverage is a tool that allows traders to open positions larger than their actual balance, thereby increasing the impact on profits and losses. On the Binance platform, leverage of up to 125x can be used for some pairs; however, high leverage increases the risk of rapid liquidation. Therefore, experts recommend setting an appropriate leverage level (such as 5×–20×) and placing Stop-Loss orders to protect capital.
✦ Opportunity: If you use 10× leverage and the price rises by 3%, the actual profit will be 30%.
✦ Risk: The same negative movement of 3% could wipe out the entire margin and close the position.
Rely on precise technical analysis, determine entry and exit points before opening any position, and monitor market liquidity and trading volume to ensure effective risk management.