Leverage Trading:
10x leverage to 125x leverage, is it a path to overnight wealth or financial ruin??
10x leverage: For example, if you have 100 dollars and use 10x leverage, you can control 1000 dollars worth of assets. Doesn't that feel like your net worth just doubled in an instant?
75x leverage: Still using that same 100 dollars, if you apply 75x leverage, you now have 7500 dollars to trade with. This is like a windfall from the sky!
125x leverage: This is quite a bold choice, turning 100 dollars into 12500 dollars in an instant. You must feel like you're on top of the world, right?
Liquidation Risk: With 10x leverage, a 10% drop in price will trigger liquidation.
What about 75x leverage? A decline of 1.33% will wipe you out.
125x leverage is even more extreme; a mere 0.8% adverse fluctuation could cause your investment to go down the drain.
Psychological Pressure: The stress that comes with high leverage is no joke; even a small price fluctuation can make your heart race and leave you sleepless at night.
High Costs: Large positions mean higher trading fees and financing costs, especially when holding overnight positions, as the money flows out like water.
Start Small: If you are a beginner or have a low risk tolerance, it's wise to start with 10x leverage or lower.
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Set Stop-Loss Orders: Don't be foolishly waiting to lose money; use stop-loss orders to automatically close unfavorable trades and limit losses. This is the smart move.