👇🏻 What is leverage?

Leverage means using borrowed funds to trade. For example, if you trade $100 with 2x leverage, you use your $100 and borrow another $100. So your total trade is $200 and your profits and losses are doubled. But if you lose 50%, the trade will be closed to prevent further losses.

Many people mistakenly think that leverage allows you to earn more money. In fact, it helps limit risk by investing only a portion of your capital. For example, with 2x leverage, you can invest 10% of your funds using only 5% of your equity. This means that you do not risk all your capital on one trade.

Leverage is not a way to increase income, but a tool to reduce risk. Understanding this is important for safe trading.