In the world of trading, especially in volatile markets like cryptocurrencies, gains and losses are extremes. There is no middle ground: either you learn to play smart or you lose everything. And one of the factors that amplifies this is leverage.
What is leverage?
Leverage is like a "loan" from your broker to let you trade with more money than you actually have. It can amplify your profits, but it also dramatically increases your risks. It's the classic "doubling down" approach.
Example:
With 10x leverage, a 1% market movement generates a 10% gain (or loss) on your capital. It sounds incredible, but any mistake can quickly wipe out your account.
⚠️ Remember: leverage is a double-edged sword. Use it with caution and discipline.
Isolated Margin vs. Cross Margin
These two modes are essential for managing risk when using leverage.
1️⃣ Isolated Margin
You limit the risk of a single position.
If the position is liquidated, you only lose the amount allocated to it.
Ideal for those who want greater control and to prevent errors in a position from compromising all capital.
2️⃣ Cross Margin
The risk is shared across the entire available balance in your futures account.
If a position goes into liquidation, it may use the entire balance to try to avoid total loss.
Risky, but can be useful for experienced traders who want flexibility in quick moves.
Golden Tips for Surviving in the Market:
1️⃣ Control your emotions: Don't enter into large positions just because you are confident.
2️⃣ Risk management is everything: Never risk more than you can afford to lose.
3️⃣ Use stop-loss: Always have a plan to exit before the loss increases.
4️⃣ Study before operating with leverage: It is a powerful tool, but dangerous if used without knowledge.
📈 It's all or nothing, but with discipline you increase your chances of making a profit!
👉 Comment below: Do you prefer to trade with isolated or cross margin? Have you ever used leverage? Share your experience!
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