Leveraged Trading: From 10x to 125x, Can You Get Rich Overnight or Lose Everything?
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Leverage Multipliers and Potential Returns:
10x Leverage:
Principal: 100 yuan
Trading Assets: 1000 yuan
Profit Example: Profit of 10,000 yuan, total assets increase to 11,000 yuan, feels pretty good.
75x Leverage:
Principal: 100 yuan
Trading Assets: 7500 yuan
Profit Example: Profit of 75,000 yuan, total assets soar to 82,500 yuan, the dream of getting rich overnight comes true.
125x Leverage:
Principal: 100 yuan
Trading Assets: 12,500 yuan
Profit Example: Profit of 125,000 yuan, total assets reach 137,500 yuan, instantly becoming a millionaire.
Liquidation Risk:
10x Leverage: A 10% price drop could lead to liquidation.
75x Leverage: A 1.33% price drop will trigger liquidation.
125x Leverage: A mere 0.8% drop could lead to liquidation, extremely high risk.
Psychological Pressure and Costs:
Pressure of High Leverage Trading: Every small market fluctuation can make you anxious, even affecting sleep.
High Trading Costs: Large positions mean higher trading fees and financing costs, especially when holding positions for a long time, costs can often be very high.
How to Reduce Risk and Operate Effectively:
Start Small:
Beginners should start with 10x or lower leverage and gradually increase leverage.
Set Stop-Loss Orders:
Set reasonable stop-loss orders to automatically limit losses and avoid emotional trading.
Risk Management:
The risk of each trade should be controlled within 1-2% of total capital to ensure long-term profitability.
Monitor Liquidation Levels:
Pay attention to market trends in a timely manner to ensure sufficient safety space during market fluctuations and avoid hitting the liquidation line.
In summary, leveraged trading is a double-edged sword, which can bring high returns but also comes with significant risks. When operating, it is essential to remain calm, cautious, and to have adequate risk management in place.
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