What is Leverage?
Leverage means controlling a larger position with smaller capital. For example, with 10:1 leverage, $1,000 can control a $10,000 position. This can amplify both profits and losses.
Advantages
- Higher capital efficiency for short-term strategies.
- Ability to diversify exposure with less upfront cash.
- Potential to improve returns when risk is tightly managed.
Disadvantages
- Losses grow faster than in unleveraged trading.
- Higher chance of liquidation during volatility spikes.
- Emotional pressure and overtrading risk increase significantly.
Education-Only Risk Notice
This site provides educational content, not investment advice. In leveraged products, strict rules (position size, stop-loss, and daily max loss limits) are essential.
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Tip: If you are new, start with no leverage or very low leverage and focus on consistency first.