Leverage can multiply your profits... but at the same time, it can wipe out your entire account if you don't understand it well 💣
Let's understand it step by step:
✅ 1. What is leverage?
🔁 Simply:
Leverage = trading with an amount greater than your capital
For example:
If you have $100 and used 10x leverage
It's like you're trading with $1000
✅ 2. Is it risky?
Yes... if you used it without risk management.
⚠️ The leverage amplifies the result:
– Small profit × 10 = Big profit
– Small loss × 10 = Devastating loss!
✅ 3. How to choose the right leverage?
🎯 The golden rule for beginners:
Don't use more than 3x or 5x until you master risk management.
✅ 4. Practical example:
If you entered a trade with:
– Capital: $100
– Leverage: 5x
– Trade size: $500
– Stop loss: 2%
❌ Without leverage: You only lose 2 dollars
⚠️ With leverage: Losing 10 dollars = 10% of capital!
✅ 5. When to use high leverage?
Only when you are:
– You have a clear plan
– Accurate entry point
– Set stop loss
– Sufficient experience in capital management
💡 The smart trader doesn't use 20x or 50x just out of greed!
✅ 6. The best strategy for beginners:
🛡️ Use simple leverage like 2x – 3x
🎯 Enter short-term trades
📌 Earn a little... but keep playing safely
🔥 Quick tips:
✔️ Test your trades on a demo account first
✔️ Don't use high leverage during news
✔️ Don't risk more than 2% of your capital in a single trade
✔️ Remember: “Staying in the market” is more important than any winning trade!