Trading with leverage

[Wind_FURY]

Trading with leverage isn’t bad, the good thing about it is that it magnifies your profit. But then it also has its bad side which is magnifying your losses as well. I wouldn’t really say that it is that bad, as long as you know what you are doing and you are very sure that the decision you are about to make is going to work out and you make profit from it, if not then you are going to end up with a huge loss.

Anyone who is trading with leverage can use a little amount of money to make about 100% of what they’re trading with, but without leverage you’re making less, so This is why a lot of people like to trade with leverage. But at the same time they are taking a huge risk.

If there were 10 traders who used 10x leverage, how many of them, do you believe, will get a margin call sooner or later? More than 5, if you ask me.

If those traders simply HODLed Bitcoin since 2020, how many of them would be in profit? 10.

[Silberman]

Trading with leverage isn’t bad, the good thing about it is that it magnifies your profit. But then it also has its bad side which is magnifying your losses as well. I wouldn’t really say that it is that bad, as long as you know what you are doing and you are very sure that the decision you are about to make is going to work out and you make profit from it, if not then you are going to end up with a huge loss.

Anyone who is trading with leverage can use a little amount of money to make about 100% of what they’re trading with, but without leverage you’re making less, so This is why a lot of people like to trade with leverage. But at the same time they are taking a huge risk.

The thing is if only those that were expert traders used leverage then that will be OK; but the majority that are using leverage are newbie traders which were attracted by promises of huge profits in a relatively short amount of time, they do not see that even if they can produce short term profits with leverage sooner or later they will make a mistake and that is when no only they will lose the money they got with their leveraged traders but they will lose their seed capital as well.

[abrahamtownsend]

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.

That’s smart. Traders, most specifically the new traders need to understand that it’s not important to use leverage on every trade. Use it when you are very sure about a trade but it’s not good to exceed a certain limit even if you are very experienced.

[abrahamtownsend]

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.

Beginners + leverage + limited = Margin Calls/Liquidations.

Plus it’s not the only option. You can find a job, save a portion of your salary in Bitcoin. I believe you would have a higher probability of long term success with that than gambing with leverage. Think where you will be 10 years from now if you keep gambling with leverage.

Yeah, OP is trying to misguide new traders because theoretically leverage markets might look like an advantage but when getting into market then high volatility might swallow all their capital in matter of one or two sessions. Basically, limited funds cannot be a constrain for considering about leverage market.

Leveraged market might suit the traders who are able to accurately predict the market directions in short term. Such traders already might have big capital and still go for availing leverage to maximize their profit levels when trading on multiple assets.

OP:
When you are having small capital then going for leverage with all 100% of your capital might lead to disasters on a small correction on your expected market direction. Only when you gain experiences then you may start think about leverage trading.

I agree and I’m not at all trying to misguide anyone. It’s true that newbies with small capitals are the ones who mostly use leverage to quickly grow their account. A small amount of leverage can be beneficial if you are following sound analysis to predict the price movements. However, if someone is just gambling around, I won’t suggest them the same.

[abrahamtownsend]

Trading with leverage is just an option you can make a trade with low leverage or zero leverage but if you have a small amount of money only and you want to make a trade its not profitable at all, else you will put leverage so you can get a higher chance of profit. Always make a trade which you can only afford on it. Lossing a trade does not mean you lose a profit still at the end of the day number of earning on every trade is the one you gives a good outcome. So base in my experience safe leverage is with the range of 25-75x.

25X- 75X is extremely high for crypto trading.It gives me shrills. I won’t suggest it to anyone. Also, I don’t think there’s any broker who offers such a high leverage for crypto trading.

[lelahenderson]

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 that leverage trading is ideal for enhancing an account size with a small capital. But i don’t agree that it is good for beginners, it can get hard for them to identify the potentially good trades and the right time to exit a trade. Although as of now I’m using 5x leverage on turnkeyforex but I wouldn’t have done this when I just started out.
What I can recommend is trading smaller lots with leverage, so even if you lose a trade it won’t be all of your capital in 1, so splitting your money in multiple trades seems like the right thing to me.

[tvplus006]

...If those traders simply HODLed Bitcoin since 2020, how many of them would be in profit? 10.

This is too simplistic a view of holding and trading. And in this case, it all depends on how experienced the trader who uses leverage is. If this knowledge is not enough to make money on margin trading, then this will undoubtedly lead to losses and in this case the best solution for him will be a hold.

[zaesvlas]

The most important thing is not to risk beyond your capabilities. It should be understood that the outcome of such activity may not be the most positive.

[lumierre]

The most convenient exchange to trade is Binance as for me. Trading with leverage is a dangerous thing and I know that only 1 from 10 traders earn and the rest 9 actually lose. You have to investigate this market for a long period of time, study technical indicators to be a successful trader. Trading with leverage is ok for me as I don't have to risk big money to get a big profit.

[beerlover]

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 don't think there could be anything not covered by this community about crypto trading or leverage trading because in the past we had lots of similar discussions and on-which people had contributed into the core level of each details so I guess you cannot bring any merits of leverage trading because it is already proven as one of the biggest dangerous way of trading for or both beginners and experienced traders.

Still I read that leverage trading might be suitable for the traders who are all experts in technical analysis at the same time it is a fact that even professional traders are not consistent in profit making. By combining these two facts, you cannot win in leverage trading even being good at technical analysis.

[SquallLeonhart]

I agree with you that leverage trading is ideal for enhancing an account size with a small capital. But i don’t agree that it is good for beginners, it can get hard for them to identify the potentially good trades and the right time to exit a trade. Although as of now I’m using 5x leverage on turnkeyforex but I wouldn’t have done this when I just started out.
What I can recommend is trading smaller lots with leverage, so even if you lose a trade it won’t be all of your capital in 1, so splitting your money in multiple trades seems like the right thing to me.

The idea would be to become a veteran spot trader first, and then put a small amount into leverage trading. That way you could turn small amount into big amount if you are good at what you are doing and a little bit lucky as well, but it is definitely a must that you should be an expert at what you do.

Without that expertise, you would be just gambling and considering how all of your bet would be gone as soon as it goes to wrong direction, I would suggest that small amount is a must if you are starting out new. So, you could be a "newbie" but in leverage trading, even the most expert people start for the first time one day, and that means they are newbies in leverage, but you need to become amazing at everything else before you turn into leverage.

[Wind_FURY]

...If those traders simply HODLed Bitcoin since 2020, how many of them would be in profit? 10.

This is too simplistic a view of holding and trading.

Simplistic? But you can prove it for yourself, try HODLing Bitcoin vs. Trading then track your 10 year results. Plus statistically 90% of active “traders” lose their money to the top 10%. That’s a fact.

OR, I believe MANY of you from before 2017 have experience this. Recall all your trading losses in Bitcoin and compute how much you would be having now if you merely HODLed.

And in this case, it all depends on how experienced the trader who uses leverage is. If this knowledge is not enough to make money on margin trading, then this will undoubtedly lead to losses and in this case the best solution for him will be a hold.

Then we have the same opinion?

[topbitcoin]

Big profit although use small capital, but big risk because only need small movement and it will really affect on our trade. I think before do leverage trading or maybe future trading that still in trend for now, we should really good in spot trading, because leverage is more complicated and not simple as we buy and hold, we must set stop loss, or maybe do anything to avoid to be liquidated.

[Mahanton]

Big profit although use small capital, but big risk because only need small movement and it will really affect on our trade. I think before do leverage trading or maybe future trading that still in trend for now, we should really good in spot trading, because leverage is more complicated and not simple as we buy and hold, we must set stop loss, or maybe do anything to avoid to be liquidated.

Big profits but really be very risky and if you dont know on what you are doing then it is just simply be considered are pure gambling yet you could blow up your account
in a short span of time specially with leverage or futures trading but there are people who do really love on dealing with this kind of trading other than spot.
Why? they dont like on seeing small profits that they could get on spot trading which i could say to be a very bad kind of behavior.
Trade on this one on your own risk and dont be shocked on how things to be that fast.

[livingfree]

Big profit although use small capital, but big risk because only need small movement and it will really affect on our trade. I think before do leverage trading or maybe future trading that still in trend for now, we should really good in spot trading, because leverage is more complicated and not simple as we buy and hold, we must set stop loss, or maybe do anything to avoid to be liquidated.

Someone who's not good in spot trading, he has to practice spot first before proceeding in futures.

But there could also be traders that are talented and better in futures but not performing well trades on spot. It's just the other way around and we're aware where we're good in these two trades.

I'm not good in futures so I'm staying in spot.

[TheGreatPython]

you can prove it for yourself, try HODLing Bitcoin vs. Trading then track your 10 year results. Plus statistically 90% of active “traders” lose their money to the top 10%. That’s a fact.

OR, I believe MANY of you from before 2017 have experience this. Recall all your trading losses in Bitcoin and compute how much you would be having now if you merely HODLed.

I agree with the half of your statement but I disagree with the other half or more like I do not have data for that. I agree that yes if you hold bitcoin and not trade it, then there is a great chance that you would make a profit from it. Buy bitcoin today and wait for 10 years and you would be doing much much better. However, there is also the fact that traders could make profit, we do not know how many of them make a profit.

You are saying that 90% of active traders lose their money but there is no proven data for this, you are just making it up, this is the part that I can't agree with because there is no data to back this claim up. So yes, holding is guaranteed profit, so why would people trade I do not know, but if they are making more money than a holder then it would make sense.

[LUCKMCFLY]

The most important thing is not to risk beyond your capabilities. It should be understood that the outcome of such activity may not be the most positive.

You are right, but here for example if there is no experience in leverage, it is always good to start with a 5% leverage, because if the operation goes against the money that is lost it is not much like leveraging at x100, however I do not recommend the leverage when there is no previous experience, I really recommend is to start on a platform with real money to be able to test well how it works and what the "take profit" is like.

[fullhdpixel]

I do not recommend the leverage when there is no previous experience

I do find that most people are having similar opinions like they will never recommend leveraged based trading but OP got complete different view on leverage trading. Not sure why OP is having different opinion than most of the people of this community.

I really recommend is to start on a platform with real money to be able to test well how it works and what the "take profit" is like.

I understand that being real money or not is not a concern here because you can start with demo money but you should start only in spot trading and not in leveraged trading. Even you are practicing in leveraged environment with demo money, you cannot learn any useful experience there because the market volatility will not let you learn anything out of real time experiences. You must need a common and steady environment where you will spend time to learn things but rushing out everything will not help you to gain knowledge about it.

[Silberman]

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.

That’s smart. Traders, most specifically the new traders need to understand that it’s not important to use leverage on every trade. Use it when you are very sure about a trade but it’s not good to exceed a certain limit even if you are very experienced.

That could be a decent approach, after all not every single trade that we make has the same chances of turning favorable to us, but unfortunately newbies do not do something like this, many newbies have the mistaken idea they can win 100% of their trades and when you have that kind of mentality then it does not make sense to not use leverage on every single trade, unfortunately their expectations about their skills and winning rate are as out of place as the profits they want to get, making them more susceptible to make mistakes from which they cannot recover.

[Shasha80]

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.

That’s smart. Traders, most specifically the new traders need to understand that it’s not important to use leverage on every trade. Use it when you are very sure about a trade but it’s not good to exceed a certain limit even if you are very experienced.

That could be a decent approach, after all not every single trade that we make has the same chances of turning favorable to us, but unfortunately newbies do not do something like this, many newbies have the mistaken idea they can win 100% of their trades and when you have that kind of mentality then it does not make sense to not use leverage on every single trade, unfortunately their expectations about their skills and winning rate are as out of place as the profits they want to get, making them more susceptible to make mistakes from which they cannot recover.

Crypto trading carries a very high risk, so don't be too bold to use leverage in trading. We must first look at our analytical skills, if we still often
lose money when trading, don't try trading with leverage. I see newbies who use leverage when trading, because they want to make big profits
right away. We must be aware of the risk that we will lose all the capital we have if we use leverage without proper preparation. Therefore trading
with leverage is only recommended for professional traders, who are already experienced in the trading world. I've been trading crypto for 5 years,
very rarely trade with leverage, because I know the risk is very big. I prefer trading without leverage, it doesn't matter the profit generated is small,
but if it is accumulated it will be large too.