Trading Leverage

[Woodie]

Exchanges make money as the leverage increases. The exchanges do not care if you lose or not, what the exchanges care about is the profit they want to make.

You are right about this!

But one way or another fees will have to be paid, if its not slippage that turns out to be high, expect spreads to be over the roof otherwise besides what the exchange adds as fees leverage increases our buying power which is a win-win for both exchange and traders as we can make more money from a small  capital injection !!

In life, leverage is good as it helps to help us accomplish a goal faster. But in trading, leverage in trading is clearly a bad deal.

I disagree!!!

Leverage only gets bad when the trader has no working strategy and not using risk management to protect their capital!!

Truth be told, we have some may traders out there trying to get rich quick and what tend to happen is gambling and not trading..if we can work on getting a disciplined approach then leveraged trading will become a good concept for everyone.

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[MusaMohamed]

In life, leverage is good as it helps to help us accomplish a goal faster. But in trading, leverage in trading is clearly a bad deal.

I disagree!!!

Leverage only gets bad when the trader has no working strategy and not using risk management to protect their capital!!

Truth be told, we have some may traders out there trying to get rich quick and what tend to happen is gambling and not trading..if we can work on getting a disciplined approach then leveraged trading will become a good concept for everyone.

I agree with you.

It's because we can not control the market and force the market moves to a direction that will help our trading positions end with profit so let's forget about it.

Another thing we can control is our emotion, greed, fear, panic that will all affect our trading action. However, unfortunately, when we use leverage, we will become more easily lose control of our emotion, greed, fear, panic, then will lose control of our trading action.

Bad control on our position will cause loss, hence if we are unsure that we can control these emotional things, we need to have prevention, don't use leverages.

[retreat]

The safety of using leverage is directly related to risk management, compliance with which depends only on you. And if you do not adhere to the risk management strategy, then your entire trading will be comparable to a casino in which you will eventually lose your deposit.

Because of this, it is important for a trader to be able to understand risk management and how to take mitigation steps to reduce the risk of using leverage in their trading, for example using stop losses, choosing leverage that is not too high, and in-depth analysis of their trading to reducing the potential for dangerous positions for traders. Because leverage was developed to help traders, and if they understand the risks of using it and can make the best use of it for their trading, it should be a good tool for them in the world of trading.

[bitgolden]

I know you gave an example only but in this volatile market, stop loss with 1 - 2 % will be terrible. I know stop loss, stop limit orders are very helpful to minimize loss and avoid serious loss in a market crash but 1 - 2 % should not be used as a limit to exit the market with either Stop loss or Stop limit order.

Yes, indeed, I have given these figures as an example. Nevertheless, these figures are quite real if you open a long position from support and, accordingly, short from resistance. In this case, you will have a very small loss if the price moves in the opposite direction to your expectations.

I mean numbers aside, the idea is definitely a good one. I wish that there were a lot more newbies who actually did what you are suggesting here because that would be a great starting point. Obviously I would definitely suggest getting better at it and growing from there because every person would have their own preference on things and should be adjusting it according to what they enjoy.

However, we should probably consider the situation to be profitable if we know if this was the starting point and not really get it any where else, there are way too many problems because people end up with newbies who end up making a lot of mistake. This should be the key thing that you should expound and consider writing a whole topic about it so that newbies would have something we can refer to.

[justdimin]

I actually never thought that trading with leverage was good for us, except for professional traders who are already experts and are used to leverage. Trading with leverage is something that carries high risk. Yes, indeed, it can really make us get extraordinary profits. But on the contrary, it can also make us lose our money quickly. especially if we play with high leverage, and without sufficient knowledge. So, if you are not ready, then it is better not to leverage, or just use small leverage with good funds management.

well thats kinda the essence of leverage honestly usually I think the exchange will always give warning of the side effect of using the leverage feature it is definitely described as a double edged sword where it grant opportunity to people at the cost of their capital.
most of the future trader using leverage out there I think are people that are experienced already, if they are just some random newbies that are leveraging their asset it might means they are greedy and will probably just lost the money along the way.
if you are experienced in a nutshell feel free to use the leverage feature, but if you think your newbie, you know whats best for you maybe the spot trading is already good enough a place to start.
i think its as simple as that.
its just the right feature provided by exchange to give people the chance to do much more than their capital actually allowed to do and I think there's no problem if an exchange having it as a feature.

Leverage basically tells people "you could get very rich while risking lesser money but you could also lose all of it instead of just some of it". That is literally what all of leverage is. Instead of putting up 100k and hoping to make 5k profit, you invest 10k and hope to make 5k profit, that's amazing, but instead of losing 5% you may end up losing 50% instead and that's the risk.

Unfortunately, a lot of people lose instead of winning and that's the issue, too many people are taking way too much risk with this and we should consider why there are so many people who lose. I think one of the main reasons is that people lose because they are not aware of the risks involved with it and that is why they are not making that money back, I hope people go into leverage only after they know what they are doing.

[FanEagle]

Thankfully not a lot of people who understands how any of this works ends up losing money, it is all the newbies who should have stayed away to begin with, that ends up with a problem, and those should stay away anyway, and they still end up with something that causes them to just focus on something else.

I understand that newbies want to make money as well, but you can't just make money because you want to, and taking a huge risk like this doesn't guarantee you to make money neither. If you insist on this, and do it as a newbie, and then end up losing money, that's really not something I would be saying anything about, because you "sort of" deserved to lose that money, because you did something you shouldn't have done to begin with.