Avoid trading with leverage before it destroys your portfolio.
Many traders believe that leverage is a shortcut to quick wealth, but in reality, it is one of the fastest ways to lose everything. Let's simplify the reality of trading with leverage.
What is trading with leverage?
Leverage allows you to borrow money from an exchange to trade with a capital greater than what you actually have.
Example: With only $100 in capital and 10x leverage, you control a position worth $1000.
Does this sound strong? Here is the risk...
The hidden risk of leverage
A small movement in the wrong direction can wipe out your entire account. This is called liquidation.
In spot trading, the value of your assets can drop by 90% and then recover.
With leverage, even a drop of -5% can lead to the liquidation of your position.
No time to wait - once liquidated, you will lose your money.
Better strategy: Gradual growth, strong growth
The real path to wealth in trading is as follows:
100 dollars ← 1000 dollars ← 10000 dollars ← 100000 dollars ← 1000000 dollars ← 10000000 dollars
It takes time, discipline, and smart decision-making.
5 essential habits for long-term trading success:
1. Start with small steps - prioritize learning over profits at first.
2. Avoid leverage - especially if you are still in the process of gaining experience.
3. Use stop-loss orders - protect yourself from big losses.
4. Take profits regularly - don't be greedy. Protect your gains.
5. Study daily - learn market patterns, price movements, and news.
In summary:
Leverage is not necessary for success. What you really need is patience, discipline, and perseverance.
Grow your account gradually. Protect your capital. Trade wisely.
