Avoid trading with leverage before it destroys your portfolio
Many traders believe leverage is a shortcut to quick riches, but it is actually one of the fastest ways to lose everything. Let's simplify the reality of trading with leverage.
What is leveraged trading?
Leverage allows you to borrow money from an exchange to trade with a larger capital than you actually have.
Example: With just $100 in capital and 10x leverage, you control a position worth $1000.
Does this sound strong? Here’s the danger...
The hidden danger 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 -5% drop can lead to your position being liquidated.
There's no room for waiting - once liquidation occurs, you will lose your money.
A better strategy: gradual growth, strong growth
The true path to wealth in trading is as follows:
$100 → $1000 → $10000 → $100000 → $1000000 → $10000000
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 significant 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.