Many traders hear the word leverage
And only a few truly understand what it actually means.
📌 Some win quickly with it
📌 And some lose their entire account because of it
And the reason?
Leverage does not forgive those who do not understand it
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🧠 What is leverage simply?
Leverage means:
Trading with an amount larger than your actual capital
📌 A very simple example:
• You have $100
• Using leverage ×10
• You are now trading as if you own $1000
🔹 Your profit doubles
🔹 And your loss also doubles
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📈 How does leverage work in practice?
If the price moves:
• +1% in your favor
→ You earn 10% on your capital
• −1% against you
→ You lose 10%
📌 The higher the leverage
Increased speed and danger
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❌ Where do beginners go wrong?
• Using high leverage without experience
• Open a large position with a small capital
• Ignoring the liquidation point
• Believing that leverage = quick profit
📉 Result:
Liquidate the account before the market actually moves
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⚠️ What is liquidation?
It is:
• Closing the position forcibly
• When the price reaches a certain loss point
• You will lose the entire margin used
📌 High leverage =
📌 Liquidation point very close
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🧠 How do professionals use leverage?
✔️ Low leverage (×2 – ×5)
✔️ Calculated position size
✔️ Clear stop loss
✔️ A trade with a reason and a plan
✔️ Do not use leverage to compensate for losses
📈 The professional asks:
How do I protect my account?
Before asking:
How much will I earn?
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✅ When is leverage a friend?
• When you fully understand the risks
• When using low leverage
• When managing capital strictly
• When trading with a plan and not emotions
❌ When do you become an enemy?
• When greedy
• When retaliating against the market
• When using high leverage
• When trading without knowledge
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🎯 The golden summary:
Leverage is a tool
Not a strategy
And it is not a shortcut to wealth
📌 If you don't understand it… it will destroy you
📌 If you master it… it will serve you
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💬 Important question:
Have you ever used leverage?
• Yes and I lost
• Yes and I won
• No, and I want to learn it correctly
Share your experience 👇
In the upcoming post, we will explain how to choose the appropriate leverage step by step.