The Importance of Choosing Leverage: How to Avoid Risks and Usage.

In the world of trading and investing, leverage (or **leverage**) is a powerful tool that can significantly amplify potential profits. However, along with opportunities, it also carries serious risks. An incorrect choice of leverage size can lead to substantial losses, even to the complete loss of capital. In this article, we will explore what leverage is, how it works, and why its wise choice is key to successful trading.

What is leverage?

Leverage is borrowed funds provided by a broker to a trader to increase the size of a trade. For example, if you have $1,000 in your account and you use leverage of 1:10, you can open a position of $10,000.

Calculation formula:

Trade size = Own funds × Leverage

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