📈 What is Margin Trading?
Margin trading means borrowing money from a broker to trade larger positions than your own capital allows.
You’re using leverage to multiply potential profits — but also potential losses.
💡 Basic Concept:
You invest some of your own money (called margin).
You borrow the rest from the broker.
If the trade goes well ✅, you keep the profit.
If it goes badly ❌, you may lose more than your initial investment.
🧠 Example:
You have $100.
You trade with 10x leverage → Total position: $1,000.
If the price moves +5%, you gain $50 (50% profit).
If the price moves -5%, you lose $50 (50% loss).
🚨 Risk Alert:
If the trade goes too far against you, the broker may issue a margin call (asking for more funds) or liquidate your position to cover losses.
✅ Pros:
Amplifies gains #HighReward
Trade larger positions #LeveragePower
❌ Cons:
Amplifies losses #HighRisk
You can lose more than you put in #MarginCall
📊 Common Leverage Ratios:
2x, 5x, 10x, sometimes even 100x (⚠️ very risky)
🔐 Tips for Beginners:
Start small #PracticeSafeTrading
Use stop-loss orders #RiskManagement
Never trade more than you can afford to lose #TradeResponsibly
Understand liquidation levels #KnowTheLimits