I'll be a bit stuffy. But it might come in handy for someone. If the order goes into the negative
Leverage on Binance in futures trading is a tool that allows you to trade with a larger amount than what is in your balance. It increases both potential profit and risks.
For example: If you have $100 and you use 10x leverage, you can open a position of $1,000.
If the market moves in your favor, profits will be calculated based on the total amount ($1,000), not just your deposit ($100).
But if the price changes against you, losses also increase. If losses reach your deposit ($100), the position will be liquidated.
Key points:
1. Leverage range: Binance allows you to choose leverage from 1x to 125x (depends on the asset).
2. Margin: The amount you invest is called margin. The higher the leverage, the less margin is required to open a position.
3. Liquidation: In the case of a strong price movement against you, if the balance becomes insufficient to maintain the position, liquidation will occur.
4. Risk: High leverage increases the likelihood of both quick profits and liquidation.
For beginners, it is recommended to use low leverage, such as 3x–5x, to reduce risks.