Beware! Leverage Trading: Overnight Riches or Ruin?
If you have been following me for a while, you should know that leverage is the biggest innovation by brokers.
Leverage is a great tool for brokers to earn 1000 times profit.
This started in the early days of arbitrage trading.
Now you may ask, what is the secret of arbitrage trading?
Well, to understand this, my friend, you need to know how gambling works. Just like horse racing, there are two types of gamblers. One type pays money directly to the race management to bet on horse races. The other type of gambler does not pay anything to the race.
They watch the race from a distance, or even not at all. They simply form a small group of people to bid on horse races. There is a broker in the group who takes all the money, and in most cases, he takes all the money because 90% of the time all the bidders lose.
Arbitrage trading is the same. Some brokers are not regulated at all. They just sit there and allow people to bid on various currencies and stocks. But most clients are not that wealthy. The money they invest is very little. Therefore, these speculative brokers invented a system called X.
They started allowing people to invest $10,000, while actually only investing $10. They call it 1000x $10.
When regulated brokers saw this, they thought why don’t we do this? They conducted research, legalized it, and called it leverage. They said they would give you a loan while you invest. As long as your margin is still there, the loan is still there. Once the margin is gone, the loan and real money are gone.
The market experienced a crash, and next I will prepare some coins suitable for bottom fishing as a recovery plan. Feeling lost and helpless? Follow me! Choices are greater than effort.
