what Is leverage?
The leverage is a loan that an exchange give you to do big trade with your small capital. Exchange will help you to earn more with small investment.
How leverage works?
understand it by an example.
Spouse you have 100$ in your account and you analyse a coin like #BTC #ETH #sol etc. that these coin market will be going down or up so you want to trade on large scale to earn profits in huge amount so you use leverage to open large position. you take 20× leverage on your trade it's mean now your balance is 100$×20 = 2000$ you can trade with 2000$ so the balance of 1900$ is from exchange.
what Is the Benefits of leverage?
the most huge benefit of leverage is you can trade on large scale by investing minor amount let's take an example
you take 20× leverage on your 100$ and trade so you long or short any coin let's take sol example
spouse sol price is 100$ so you long or short it with lleverage of 20× you can buy 20 sol token and after passage of time the sol amount will up from 100$ to 110$ so your profit will be 110$ × 20 = 2200$ lets subtract the amount of leverage which will be
2200$ - 2000$ =200$ that's mean you earn 100$ by investing 100$ now if you don't take any leverage and simply trade with 100$ so your profit will be only 10$ there is a huge difference that's the magic of leverage.
what is the disadvantage of leverage?
the biggest disadvantage of leverage is that it wipe your account if your analysis is wrong. so do it very carefully.
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