Trading with leverage

[abrahamtownsend]

Here are the pros I could sum up:

. First of course is the bigger market exposure. It seems like the right time to cash in on the crypto market, and for many beginners with limited capital, leverage seems to be the only option.
. Lesser risk when you set tight stops and trade smaller amounts. You don’t risk all of your capital and as you gain experience, learn how to navigate the leveraged trading market.
The biggest disadvantage obviously is the extreme volatility of the market which can magnify losses as much as it can increase profits through leverage.
How many of you here are using leverage to trade crypto, and how much, and through which broker? Let’s bring to light the many unknown aspects of crypto trading, besides what is known - that you screw things up when you don’t understand technical analysis and blindly enter and exit trades.

[mk4]

While having tight stop losses can definitely help decrease risk, it's definitely going to increase the likeliness of you losing trades by orders of magnitude. Leverage is simply not the best way of learning how to trade. It's mostly just used as a sort of 'Hail Mary' of people with low amounts of money, in the hopes that they could gamble away their small amounts into good amounts.

And leverage isn't the only way of winning big. You can focus on small-mid caps to potentially have higher potential price increases. And yes, these are risky, but not as risky as leverage trading for the absolute trading newbie.

[Oshosondy]

It seems like the right time to cash in on the crypto market, and for many beginners with limited capital, leverage seems to be the only option.

Trading is very risky, common spot trading still leading to losses if not talked about leveraging, leveraging increase the risk. Even going for higher leverage makes the risks higher and new traders that are vulnerable to loss are the ones that like higher leverage.

Lesser risk when you set tight stops and trade smaller amounts.

Tight stop loss has advantage and disadvantage, do not expect the position opened to alwas first go in the direction you analysed it to go, it can first go the opposite direction and then favor your direction later.

The biggest disadvantage obviously is the extreme volatility of the market which can magnify losses as much as it can increase profits through leverage.

Only when the price is not in the direction of the position, that is why leveraging is disadvantage, there are still chances that the price of the coin taken to retrace.

How many of you here are using leverage to trade crypto, and how much,

Leverage trading significantly got me into trouble after many months of experience, even two years of experience, the better is to use 2x leverage but the best is to never use leverage.

[MIner1448]

Trading with leverage is a very dangerous thing for a beginner, especially for a gambler, because if you try it once, you can't pull everything off.
As a beginner, I was losing my deposits, trading with a leverage of x10, x20, but I realized that it was necessary to trade with a maximum of x5, and it would be hard to stop.

[tbct_mt2]

The market just crashes 1 hour ago. It is a good example you can take into consideration and answer the question by yourself. Whether you should trade with leverage. What leverage to use. How much the capital for leverage trading is in your total capital. Cross or isolated collateral margin trading.

If today, you got a margin call in the last 1 hour, the answer is You should stop trading with leverage. If you are lucky and were not liquidated today, you will be liquidated in the future if you won't improve your trading skills.

[crwth]

I think it doesn't matter when you have leverage or not as long as you know what it's for and how it can affect your trading journey ahead of you. Most of the time, people don't understand and see how important it is to consider leverage and manage it correctly. It's almost always going to be abused at first, and you will get liquidated. It's crucial to know your liquidation limit with your capital and always understand that it's always going to be like that.

If you don't learn it, you can gamble in casinos instead of the trading exchange. It depends on the person on how it's going to be used.

[Zackgeno96]

Trading with leverage is a very dangerous thing for a beginner, especially for a gambler, because if you try it once, you can't pull everything off.
As a beginner, I was losing my deposits, trading with a leverage of x10, x20, but I realized that it was necessary to trade with a maximum of x5, and it would be hard to stop.

It's not recommended for newbies especially if they don't master the risk management. That's what will happen to any traders who don't know how to manage the risk and they just rely to luck and will ended up broke. I use high leverage even though I'm not a professional trader but I only use it if I'm really confident with my technical analysis.

[Hippocrypto]

Here are the pros I could sum up:

. First of course is the bigger market exposure. It seems like the right time to cash in on the crypto market, and for many beginners with limited capital, leverage seems to be the only option.
. Lesser risk when you set tight stops and trade smaller amounts. You don’t risk all of your capital and as you gain experience, learn how to navigate the leveraged trading market.
The biggest disadvantage obviously is the extreme volatility of the market which can magnify losses as much as it can increase profits through leverage.
How many of you here are using leverage to trade crypto, and how much, and through which broker? Let’s bring to light the many unknown aspects of crypto trading, besides what is known - that you screw things up when you don’t understand technical analysis and blindly enter and exit trades.

I think it doesn't matter if you have using leverage or not as long as you know what it is and how it can affect your trading journey ahead of you. Leverage trading as far as I know, in the most basic sense, is any type of trading that involves borrowing money or otherwise increasing the number of shares involved in a trade beyond the number of shares you could afford when paying in cash. It’s not a bad thing to trade on leverage if you know what you’re doing and understand the risks. But if that’s not the case, it’s extremely risky and you could potentially lose a lot more than you can afford to. Trading has a lot of risk that's why we need to be more careful on it.

[Mauser]

How many of you here are using leverage to trade crypto, and how much, and through which broker? Let’s bring to light the many unknown aspects of crypto trading, besides what is known - that you screw things up when you don’t understand technical analysis and blindly enter and exit trades.

I am not using any leverage when it comes to trading. In the past I traded some futures with friends but only short term. The higher risk for trading on margin was not for me. You said that higher exposure we get through leverage is a positive thing for trading, that is only true when the market moves in our direction. When we are losing the leverage will make our losses even worse because we still have to repay the loan in the future. That is why I would never recommend new traders to work with leverage. Even when using tight stop losses there is always risks involved to lose more money. Even experts in trading who know technical analysis very well can get hurt with leverage. Trading is not a guaranteed success, no matter your experience level. Unforseen risks like a market crash can be devastating when using leverage. In my opinion there are two ways to trading, either you try to maximise your returns, at which point leverage can be helpful, or you try and minimise your risk for a certain amount of return. These days I am trying to focus more on minimising risks.

[JeromeTash]

. First of course is the bigger market exposure. It seems like the right time to cash in on the crypto market, and for many beginners with limited capital, leverage seems to be the only option.

Nope, it's the very last option for beginners, or else they will even lose all the Limited capital they have in an instant because they don't know how the market works or the trading basics.

. Lesser risk when you set tight stops and trade smaller amounts. You don’t risk all of your capital and as you gain experience, learn how to navigate the leveraged trading market.

With the very volatile crypto market, tight stop losses will definitely lead to a very low win rate. Not recommended.

[lalabotax]

In my personal opinion, trading with leverage in Margin trading or Future is very risky. ANd the risk is higher than trading on the spot.
I know that the earning or profits are very promising, but the higher profits, of course, higher risks.
We can use the stop-loss feature, but if we also don't know the exact way to set up this, we may also have the risks.

Of course, every trading will have different risks and also everybody has their pons and cons.
As a beginner, I will prefer only to trade on the spot market although it still has risks but at least fewer risks.

[Oshosondy]

Trading with leverage is a very dangerous thing for a beginner, especially for a gambler, because if you try it once, you can't pull everything off.
As a beginner, I was losing my deposits, trading with a leverage of x10, x20, but I realized that it was necessary to trade with a maximum of x5, and it would be hard to stop.

Trading with leverage is very risky, but why using gambling? Anyone that is making use trading as gambling will not even gain but lose and lost more and more if not having the knowledge and experience about trading, even using no leverage is not meaning someone can not still lose.

5x leverage is not bad at all, but it is very possible someone can lose the whole money during volatile market if the price go against the position taken by the trader.

I think it doesn't matter when you have leverage or not as long as you know what it's for and how it can affect your trading journey ahead of you. Most of the time, people don't understand and see how important it is to consider leverage and manage it correctly. It's almost always going to be abused at first, and you will get liquidated. It's crucial to know your liquidation limit with your capital and always understand that it's always going to be like that.

If you don't learn it, you can gamble in casinos instead of the trading exchange. It depends on the person on how it's going to be used.

Trading and gambling are two different things entirely, I am not saying someone can not do both together or choose the one he likes but they are different. I use the money I can afford to gamble, but I still put more to trading because gambling is riskier.

It is good to manage leverage, the main cause of liquidation is the leverage used, many people are losing money and  tired all because they are using leverage or using too much leverage. I started to trade future with 125x, I later know that even using 10x is too much and resulting to liquidation. There is nothing better than using 2x or not to leverage at all.

[Zilon]

Here are the pros I could sum up:

. First of course is the bigger market exposure. It seems like the right time to cash in on the crypto market, and for many beginners with limited capital, leverage seems to be the only option.
. Lesser risk when you set tight stops and trade smaller amounts. You don’t risk all of your capital and as you gain experience, learn how to navigate the leveraged trading market.
The biggest disadvantage obviously is the extreme volatility of the market which can magnify losses as much as it can increase profits through leverage.
How many of you here are using leverage to trade crypto, and how much, and through which broker? Let’s bring to light the many unknown aspects of crypto trading, besides what is known - that you screw things up when you don’t understand technical analysis and blindly enter and exit trades.

Even with tighter stop loss leverage is still risky. I scalp majorly when I trade using leverage because the market volatility increases chances of losses if the market goes against the trend. leverage is trading on a borrowed capital which means an increased lot size. And with leverage just the same way we double our profit same way the losses comes

[frank07a]

Here are the pros I could sum up:

. First of course is the bigger market exposure. It seems like the right time to cash in on the crypto market, and for many beginners with limited capital, leverage seems to be the only option.
. Lesser risk when you set tight stops and trade smaller amounts. You don’t risk all of your capital and as you gain experience, learn how to navigate the leveraged trading market.
The biggest disadvantage obviously is the extreme volatility of the market which can magnify losses as much as it can increase profits through leverage.
How many of you here are using leverage to trade crypto, and how much, and through which broker? Let’s bring to light the many unknown aspects of crypto trading, besides what is known - that you screw things up when you don’t understand technical analysis and blindly enter and exit trades.

I agree with you, but it seems to me that there are more cons than pros. I traded using margin trading on Binance about a year ago, but at this point I was under a lot of stress. If anyone is interested, then on this page is a list of the most popular exchanges with access to margin trading.

[crwth]

Trading and gambling are two different things entirely, I am not saying someone can not do both together or choose the one he likes but they are different. I use the money I can afford to gamble, but I still put more to trading because gambling is riskier.

I know they are different things. I'm just saying to the OP that he could just go and gamble his money instead of trading because if you don't learn it, it's like you are just gambling. It's a suggestion with what the OP could do if he doesn't study it.

It is good to manage leverage, the main cause of liquidation is the leverage used, many people are losing money and  tired all because they are using leverage or using too much leverage. I started to trade future with 125x, I later know that even using 10x is too much and resulting to liquidation. There is nothing better than using 2x or not to leverage at all.

That's why it's better to understand and learn how it becomes like that and how it's being calculated. x125 is suicidal. x20 is okay, x10 is safe. That's just how I view it. As long as you have a very good spread and capital, you will be safe.

[michellee]

It will be no problem using limited funds to use leverage trading, but the problem is how good your skills in trading are because that will determine how you can profit from the trade. If you can control your trade by using a stop loss and only taking profit when you think you can make a profit, you can increase your funds using leverage trading and you could get a chance to make a bigger profit. As we know, using leverage trading will not guarantee you to make a big profit quickly. You need to have high skills in trading so you can analyze deeper in a short time.

Binance, Bitmex, Kucoin have leverage trading to start with them and I advise you to use Binance as Binance is one of the best exchanges with leverage trading.

[Mpamaegbu]

for many beginners with limited capital, leverage seems to be the only option.
. Lesser risk when you set tight stops and trade smaller amounts. You don’t risk all of your capital and as you gain experience, learn how to navigate the leveraged trading market.

If your post is in any way meant for beginners to follow, then you shouldn't be advising that in quote ☝️. Leverage trading should be the last thing to ask a beginner to go into. Yes, it allows someone with limited capital access for more trades but once the loss comes you will regret ever going for it. Again, most veteran traders don't even use Stop Loss (this is bad though), let alone beginners who may not even know how to fix it. Spot trading is best fit for beginners, than leveraging.

[cheezcarls]

I’ve experienced leverage trading several months ago. I usually do 5x to 10x for that, but yes it’s much more riskier than the traditional spot trading. If you are a beginner or newbie in trading, this isn’t for you. Even me that has some experience in leveraging trading, I had more losses than gains. This is only for those who have the emotional guts to lose an amount that they can afford to invest and trade.

[el kaka22]

When summarizing, the advantages are submissive to disadvantages which is the reason, most of this community members never appreciate about going with leveraged trading. Honestly spot trading is guaranteed for no losses when you are not hunting for targets. Simply, in trading environment, no losses is something incredible which is still possible with spot market long term trading; then why should anyone go for leveraged trading?

Let’s bring to light the many unknown aspects of crypto trading

By crypto trading, if you refer spot trading then I guess this discussion will have something useful for this community but at the same time, if you are intended about leveraged trading then I am sure only paid shills will fill this discussions with their non-sense.

[Silberman]

Here are the pros I could sum up:

. First of course is the bigger market exposure. It seems like the right time to cash in on the crypto market, and for many beginners with limited capital, leverage seems to be the only option.
. Lesser risk when you set tight stops and trade smaller amounts. You don’t risk all of your capital and as you gain experience, learn how to navigate the leveraged trading market.
The biggest disadvantage obviously is the extreme volatility of the market which can magnify losses as much as it can increase profits through leverage.
How many of you here are using leverage to trade crypto, and how much, and through which broker? Let’s bring to light the many unknown aspects of crypto trading, besides what is known - that you screw things up when you don’t understand technical analysis and blindly enter and exit trades.

Just a reminder just because you set a stop loss at a certain price it does not mean that it is going to be executed at exactly the price you specified, there is something called slippage which is the difference between the price you expect to sell and the actual price at which you sell, this means that in a moment of great volatility you could end up selling for a price way lower than what you thought, which means that just when you needed it the most the protection that you thought you had with the stop loss will not be there.