What is Leverage in Crypto Trading and How Does it Work? đ
Leverage is a tool that lets you trade with more money than you actually have. Imagine having $100 but trading as if you had $1,000âleverage makes that possible by "borrowing" funds to boost your buying power.
Hereâs how it works:
1. Amplified Profits & Losses: Leverage can multiply your profits and your losses. A 10x leverage means any profitâor lossâwill be ten times bigger!
2. Know Your Risk: Trading with leverage can be risky. If the market goes against you, you could lose your original amount (or more). Always use caution!
3. Margin Calls: If your position drops too far, you may get a âmargin callâ requiring more funds to keep the trade open or face liquidation.
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