📈NEW TRADERS, UNDERSTAND THIS BEFORE TRADING! 🗃
Leverage: The Sweet Poison in Crypto Trading📒
Imagine turning your $100 into $1,000 instantly. Sounds amazing, right? But this trick can become a nightmare quickly.
🛡 Breaking It Down: How Leverage Works
Using Bitcoin ($67,500) and Ethereum ($3,200) as examples:
*⚙10x Leverage
- You have $100.
- With 10x leverage, you’re trading $1,000.
- If Bitcoin moves 1% ($675), your position changes by $67.50.
- A 1% move gains or loses you $67.50—67.5% of your capital. A 10% move wipes you out completely.
📎100x Leverage🗑
- You have $100.
- With 100x leverage, you’re trading $10,000.
- If Ethereum moves 1% ($32), your position changes by $320.
- A 1% move gains or loses you $320—320% of your capital. A 0.5% move erases your funds.
# The Ugly Truth: Leverage Doesn’t Boost Your Profits
Leverage increases your percentage gain but not your profit amount.
Without leverage, a 1% gain on $1,000 nets you $10. With 10x leverage on $100, the same 1% gain still nets you $10. The profit remains the same, but the risk skyrockets.
# Isolated vs. Cross Margin
💹Isolated Margin:🔮
- Limits your risk to the specific trade.
- If the trade goes bad, only the margin in that position is affected.
**Cross Margin:**
- Shares margin across all your positions.
- If one trade fails, it can drag down your entire account.
⛔The Harsh Reality
Leverage feeds on the greed of small retail traders with portfolios under $200, dreaming of quick wealth. But leverage is a trap that often leads to disaster.
Leverage is a dangerous illusion. Stay disciplined, manage your risks, and avoid the high-leverage bait. Smart trading is about steady growth, not fast gambling.$ETH
#Bitcoin_Coneference_2024 #ETH_ETFs_Trading_Today #US_Job_Market_Slowdown
