Leverage
Tool to amplify gains and losses by borrowing funds.
Beginner-friendly explanation
Leverage lets you trade with more money than you actually have. It can boost profits — but also losses.
Example:
With €100, if you use 5x leverage, you can open a €500 trade.
Intermediate-level insight
Leverage works through margin: part of your funds is locked, the rest is borrowed. It’s crucial to track liquidation levels. Platforms like Binance offer leverage up to 125x.
Example:
You open an ETH trade at 10x leverage with €200: your margin is €200, but you control €2,000. A 10% drop can liquidate you.
Advanced perspective
Strategic leverage use requires strict risk management, systematic stop loss, and anticipation of high-volatility market moves. Leverage should always match the capital and strategy.
Example:
A pro trader uses 3x leverage in a breakout strategy, with a tight stop under support and a risk/reward ratio above 2.
Markets & Order Types
leverage, margin, risk, amplification, position sizing, capital, liquidation, margin trading, strategy