$ETH Attention, New Traders: Beware of Excessive Leverage!

If you're starting in the world of trading, it's exciting to see the potential for gains, but I have a crucial warning: avoid leverage greater than 10x. It's very tempting to think that multiplying your capital by 20x, 50x, or even 100x will make you rich quickly, but the reality is that it often has the opposite effect, especially for beginners.

Many new traders fall into the trap of believing that high leverage will amplify their profits. However, what it really does is exponentially magnify the risk. Here’s why:

* If you open a short position (betting that the price will go down) with excessive leverage: even a small upward movement in the price of the asset can be enough to liquidate your position, losing your investment. Instead of going down, the price goes up and you're left out.

* If you open a long position (betting that the price will go up) with excessive leverage: a minimal drop in price can mean the liquidation of your trade. What you expected to go up, drops drastically, and your money disappears.

Leverage is a double-edged sword. While it can increase profits, it similarly (or even more) increases losses. For inexperienced traders, who are still learning to manage risk and read the market, leverage greater than 10x is a recipe for disaster.

Start with low leverage, or even no leverage, so that you can familiarize yourself with the market dynamics without the added stress of a potential instant liquidation. Your initial goal should be to preserve your capital and learn, not to risk it all on a single trade.

Remember: trading is a marathon, not a sprint. Be smart with your risk.