Trading Leverage

[Lakai01]

At the risk of repeating myself:
Leverage is only needed - and should only be used - in forex trades. However, trading platforms for forex support significantly higher leverage than x5 or x10, sometimes even x500. The reason for this is simply that the daily fluctuation margins in forex trading are so small that you need such high leverage to avoid having to invest huge amounts of capital.

However, this factor does not apply to Bitcoin or crypto in general, where the daily fluctuations are already so enormous that trading without leverage is already worthwhile with small positions ... or not.

the difference of leveraging with forex and crypto in forex it incentivizes faster market movement by using high leverage with the smallest change of a price we can get big profit at the risk of the captal itself.
meanwhile with crypto its just purely leveraging for the purpose of getting bigger profit I mean in forex the purpose is also kinda the same to get bigger profit but without it the forex market would be boring.

So there is no difference after all
I would also like to have significantly more movement with small stakes in crypto. You don't necessarily have to use leverage in Forex either. For example, if you enter a trade with 1 billion dollars, it doesn't matter if the market only moves 0.001%, the movement is still enormous in terms of FIAT movements.

Don't get me wrong, I have absolutely nothing against an exchange offering leverage if clients want it. But as a crypto trader in particular, you have to be aware of what you are doing here and how quickly leverage can lead to your account being completely wiped out. Unfortunately, I'm not sure whether exchanges are doing enough due diligence and should, for example, block leverage for newly registered customers anyway.

[tvplus006]

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.

[South Park]

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.

One of best weapons in trading
Bitcoin supports and resistances for dummies

When people talk about a stop loss being 1% to 2 %, they refer to the amount of money they can lose on each trade before they are just gambling their money away, and not necessarily the level at which the stop loss level should be, so as an example, supposing the price of bitcoin was at 70k, you wanted your stop loss to be at 60k and you had a capital of 100 dollars, how big your position size should be in order to only lose 1% of your capital if the stop loss was activated? And the answer is 6.9979 dollars.

[Zadicar]

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. It messes things up for both the traders and the market. So my question is why do exchanges still offer them. They keep pushing it to traders like favourite snack?

When running up a business, then of course you would really be offering something that brings out advantage for you as a business owner. 

[hd49728]

When people talk about a stop loss being 1% to 2 %, they refer to the amount of money they can lose on each trade before they are just gambling their money away, and not necessarily the level at which the stop loss level should be, so as an example, supposing the price of bitcoin was at 70k, you wanted your stop loss to be at 60k and you had a capital of 100 dollars, how big your position size should be in order to only lose 1% of your capital if the stop loss was activated? And the answer is 6.9979 dollars.

Why do you don't think oppositely?

The importance of a trader is capital, trading capital. If a trader loses his trading capital, his trading career is over.

10% loss is 10% loss, no matter how big or small your trading capital is. $7 can be very small with many people but with some people and traders, it's big and worth to protect it.

1% or 2% loss is small, repeat it 20 times, and you will lose 20% or 40% of your initial trading capital, not small at all.

[EarnOnVictor]

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've always said that it is not about the leverage but the risk taken through it, and even if you are planning to trade with some risks, you should be planning to trade with some management that will be able to counter the excessive negative effect of the risks. This is why I appreciate what you wrote here. As an experienced trader myself, I know the value of minimizing our risks, and if someone can down it low to the level of 1-2% then it is a very good bargain that will most likely not affect the trader. Because such will not lose his money so easily, and when the trading strategy of the trader is good, it will be another opportunity to overpower the market squarely to the advantage of the trader.

Also, the use of support and resistance to place the trade is so important in minimising the risk exposure. You can't compare the person who bought an asset at about 100 pips above its support level with the person who bought it barely 5 pips above it, the latter is the better trader who is being cautious with the risk management and the account safety. Nonetheless, one should also ensure that the support and resistance strategies they use are strong enough for this task, this is where many traders miss it and not the managerial plan itself. I use trendline, price action and the peak and bottom of candlesticks to actualise it.

[senyorito123]

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. It messes things up for both the traders and the market. So my question is why do exchanges still offer them. They keep pushing it to traders like favourite snack?

For now I had the options to do dual investment within one day at Kucoin, no matter what the result is the profit remains stable.
You're right, leverage  isn't a good idea since there's a big risk involve. So to make things more productive let's rely at exchange sites progressive recommendations.
However, minimal portions of risk can be experienced but not as worst trading leveraging.

[Etranger]

Leverage will fall into gambling if you don’t know actually how to trade using leverage, but if you are an expert in trading using leverage, then one should not worry about it. In fact, it will even increase your potential profits and achieve faster your goal in trading, but for some newbies who are still starting to trade, using leverage should always be discouraged as the risk to lose is high and it can instantly vanish all your funds in just a very short time.

In my opinion, it is too presumptuous to call someone an expert in trading. Trading is not some objective and constant activity, which you can master step by step. Even if someone has great experience and has made a lot of success deals, doesn't mean he wouldn't make a mistake some day. Taking leverage is always a risk, no matter how confident you are about yourself. However, leverage trading is more "calculable", if I may say so, then gambling. Because in gambling there is little data you can stand on to make a bet, while in leverage trading you can use market instruments to make your order more probable to happen the way you think.

[Zadicar]

Leverage will fall into gambling if you don’t know actually how to trade using leverage, but if you are an expert in trading using leverage, then one should not worry about it. In fact, it will even increase your potential profits and achieve faster your goal in trading, but for some newbies who are still starting to trade, using leverage should always be discouraged as the risk to lose is high and it can instantly vanish all your funds in just a very short time.

In my opinion, it is too presumptuous to call someone an expert in trading. Trading is not some objective and constant activity, which you can master step by step. Even if someone has great experience and has made a lot of success deals, doesn't mean he wouldn't make a mistake some day. Taking leverage is always a risk, no matter how confident you are about yourself. However, leverage trading is more "calculable", if I may say so, then gambling. Because in gambling there is little data you can stand on to make a bet, while in leverage trading you can use market instruments to make your order more probable to happen the way you think.

Mistakes are inevitable and this is something that you should really be that normal on this space and its true that no matter how experienced or veteran you are, you would really be still have the chance on finding yourself that getting liquidated or being that losing money with your trading positions but the possibilities of having those recovery could really be entirely be different or noticeable in comparing into those people
who are just that new into this field. Trading leverage is something that you should really be needing up to consider or to look out because its never been advisable that you would really be setting those bars high
on which we know that this is something that would really be that so risky on doing so or not really that recommended into those people who arent really that good in spot trades.
As much as possible i wont really be  touching up this area.

[Lakai01]

Leverage will fall into gambling if you don’t know actually how to trade using leverage, but if you are an expert in trading using leverage, then one should not worry about it. In fact, it will even increase your potential profits and achieve faster your goal in trading, but for some newbies who are still starting to trade, using leverage should always be discouraged as the risk to lose is high and it can instantly vanish all your funds in just a very short time.

The use of leverage in trades always falls into the realm of gambling, as the risk is exorbitantly higher than with trades without leverage.

You won't find any professional traders who use (high) leverage, if only in livestream sessions to generate clicks, as the numbers simply move much faster and people stay on the streaming channel for longer. On the other hand, live trading has little to do with professional trading and should rather be seen as entertainment, as the factor of highly concentrated decision-making on how to react in a trade is eliminated.

[tvplus006]

...You're right, leverage  isn't a good idea since there's a big risk involve. So to make things more productive let's rely at exchange sites progressive recommendations. ..

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.

[senyorito123]

...You're right, leverage  isn't a good idea since there's a big risk involve. So to make things more productive let's rely at exchange sites progressive recommendations. ..

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.

I'd love to learn leveraging for me to understand further and have full knowledge about it, lacking of exact information is my biggest fear to deal with from it. Indeed, losing deposit is really similar with gambling at casino which is really I don't want to happen with my earned money online.
Most of my crypto enthusiast friends enters trading out of the blue, eventually they'll lose their funds due to overconfidence. That's why I'm really careful taking risk without proper understanding.

[X-ray]

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.

indeed 1 - 2% is small amount, it will at the end of the day only causes the trader to lose their money, market volatility is a thing and the market volatility tolerance should be around 10%-20% instead of just 1% its like basically you just open your position and then it get closed almost immediately, the winner here will be the exchange that gonna get all the fee.
though is it necessary using stop loss if we can limit the money we put at stake? like basically we just use 10% for leverage trading, we at worst just gonna lose that 10% but it won't ever got the position closed because the preventive measure already done before hand.
I find that to be more ideal in my opinion,  since there has been many cases where market just gonna have flash dump about 20% then climbs up again, such event I think is created artificially by whales to liquidate whoever leveraging and have cut loss measure.
that means we just getting played by the whales.

[tvplus006]

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.

I'd love to learn leveraging for me to understand further and have full knowledge about it, lacking of exact information is my biggest fear to deal with from it. Indeed, losing deposit is really similar with gambling at casino which is really I don't want to happen with my earned money online.
Most of my crypto enthusiast friends enters trading out of the blue, eventually they'll lose their funds due to overconfidence. That's why I'm really careful taking risk without proper understanding.

Before you move on to margin trading, you must learn how to trade on the spot market so that this trade brings you profit. And there, in the spot market, you will have to learn how to adhere to the risk management strategy. And only after that you can try yourself in margin trading with a minimum leverage of x2.

[Etranger]

Mistakes are inevitable and this is something that you should really be that normal on this space and its true that no matter how experienced or veteran you are, you would really be still have the chance on finding yourself that getting liquidated or being that losing money with your trading positions but the possibilities of having those recovery could really be entirely be different or noticeable in comparing into those people
who are just that new into this field. Trading leverage is something that you should really be needing up to consider or to look out because its never been advisable that you would really be setting those bars high
on which we know that this is something that would really be that so risky on doing so or not really that recommended into those people who arent really that good in spot trades.
As much as possible i wont really be  touching up this area.

The possibility of recovery after the loss of a deposit, especially a deposit with leverage, depends not only on experience in trading, but also on the psychological attitude. If a trader is experienced, but his “portfolio” contains only successful transactions, then he will perceive failure critically, this can undermine his self-confidence and unsettle him. If a person has adjusted himself that losses are the same part of the trade as winning, if he adequately treats the possibility of his own mistakes, then he will draw conclusions from such situations faster and better. And this will not demotivate him to engage in trading in the future.

[Negotiation]

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. It messes things up for both the traders and the market. So my question is why do exchanges still offer them. They keep pushing it to traders like favourite snack?

For now I had the options to do dual investment within one day at Kucoin, no matter what the result is the profit remains stable.
You're right, leverage  isn't a good idea since there's a big risk involve. So to make things more productive let's rely at exchange sites progressive recommendations.
However, minimal portions of risk can be experienced but not as worst trading leveraging.

Excess leverage in trading can amplify both potential profits and potential losses. But there's no need to fear leverage once you learn how to manage it. The only time leverage should not be used is if you take a hands-off approach to your business. Otherwise leverage cannot be used successfully and profitably through proper management.

[OcTradism]

Excess leverage in trading can amplify both potential profits and potential losses. But there's no need to fear leverage once you learn how to manage it. The only time leverage should not be used is if you take a hands-off approach to your business. Otherwise leverage cannot be used successfully and profitably through proper management.

The risk for your capital loss is from here, excessive leverages and excessive loss.

In trading, you can not make right decisions to win all times so if you have bad trading capital management, like always use 100% of your trading capital to trade with one position. Some day, with over leverage and a bad day, bad position, you will get an excessive loss. This, if happens, will take away majority of your trading capital.

It can be the end for your trading career if you repeat it a few times and lose like 99% of your initial capital.

[jaberwock]

I'd love to learn leveraging for me to understand further and have full knowledge about it, lacking of exact information is my biggest fear to deal with from it. Indeed, losing deposit is really similar with gambling at casino which is really I don't want to happen with my earned money online.
Most of my crypto enthusiast friends enters trading out of the blue, eventually they'll lose their funds due to overconfidence. That's why I'm really careful taking risk without proper understanding.

Before you move on to margin trading, you must learn how to trade on the spot market so that this trade brings you profit. And there, in the spot market, you will have to learn how to adhere to the risk management strategy. And only after that you can try yourself in margin trading with a minimum leverage of x2.

That is right. We need more money to burn in margin trading because this isn't simple as spot. This can increase our chance of earning, just like in gambling which @senyorito123 have also said. Not only more capital is the one that we can earn in spot trade but we can also obtain an experience here (on the general trading market) which is needed before advancing.

This is for us to get familiarize on some things and then the rest which are completely new to us can only or still be learned and practiced. There must also be demo trading there in margin just like in spot. We need to test our skills here first before going on the real deal.

[tvplus006]

...In trading, you can not make right decisions to win all times so if you have bad trading capital management, like always use 100% of your trading capital to trade with one position. Some day, with over leverage and a bad day, bad position, you will get an excessive loss. This, if happens, will take away majority of your trading capital...

Using leverage allows you to open more orders with different trading pairs and thereby reduce the risk. The incorrect use of leverage is that a trader opens an order for one trading pair for his entire deposit and eventually loses it.

[Distinctin]

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. It messes things up for both the traders and the market. So my question is why do exchanges still offer them. They keep pushing it to traders like favourite snack?

When running up a business, then of course you would really be offering something that brings out advantage for you as a business owner.  

And at the same time brings out the best advantage for those who are well-experienced traders as they can enhance their potential to make profits. So it’s actually a win-win scenario for both. But if you are still learning the process of trading, I suggest to avoid using leverage because it will only push your trading capital at an instant loss. However, for exchanges, they will always stick to what they’ll give them the best of their profits.