BTC price swings caused total $1.10B liquidation in last 24 hours,Can leverage works as a safegaurd?
BTC always become the cause of instant pump/dump of alts. Before Yesterday BTC instantly fell after touching $69000, highest of all time,But direct reverse to $64000 and then $61000 shook market and 279K traders got liquidation worth of $1.10 Billion.Their bad luck but hope for there good recovery.
In my last post,I urged upon to set and check liquidity,double, if you can see your liquidity in big time frame in same wick, better to avoid entry else check again with low leverage.
When a trader sets it's leverage, highest leverage shows high profit,high size fees and near liquidation.Lower leverage shows low profit,low size fees and far liquidation.
Actually What is Leverage in an understanding language?
Leverage is a size of money that a trader wants to add in it's own investment by borrowing from the market channel like binance to get more profit in return.For instance,"$20 investment= $1 profit at the same time frame I am confirmed of getting profit,greed 😄 is there too I borrowed from binance by selecting 20x ,now $400 investment=$20 profit "
So what a normal trade will do? No doubt will go for more profits.
But If this can increase profits, it also pulls down to potential losses.
Understanding Financial Leverage is too necessary to enter in a trade.My team simplify this in as:
Advantages👍🏻and Disadvantages👎🏻 of Leverage
👍🏻Increased Returns: Increase profits with borrowed funds when investment is successful.
👎🏻Amplified Losses: Losses can exceed initial investment. It also contains high risk if market flips.
👎🏻 Increased Liquidation Risk .
👎🏻High Interest fees : Interest payments on more borrowed funds.
So 1 thumbs up verses 3 thumbs, experienced traders always learn from there mistakes and acts like a sportsman even in crypto world so traders check your leverage.
#TrendingTopic: #LeverageControl