What is leverage in Trading?

Financial leverage is, in practice, managing more money than you actually have. Suppose a #Bitcoin costs 10,000 Tethers, the leverage allows you to buy a large amount of#BTCwith a small investment depending on the percentage.

If you want to buy 1 Bitcoin at 10,000 Tethers and the leverage is 5%, you only need to have 500 Tethers in the account to move the equivalent of one Bitcoin.

✅What's so good about financial leverage?

If you earn 10%, you don't earn 50 Tethers (ten percent of 500 Tethers), you earn 1,000 Tethers (which is 10% of 10,000 Tethers).

⚠️ What's wrong with financial leverage?

If you lose 10%, you don't lose 50 Tethers, you lose 1,000 Tethers.

Leverage should be used by#Traderswith extensive experience and with an effectiveness in the market of at least 80%, the incursion of novices in this type of tool could lead to significant capital losses.