đąUnderstand leverage
đThe idea of borrowing funds on margin or futures to make larger gains can sound attractive. However, with this comes the risk of being liquidated and losing all your capital quickly, as your losses are enlarged too.
đ”Liquidation isnât necessarily bad if you stay within your limits. However, losing more than you planned or risking too much money isnât responsible trading. Before you start using leverage, make sure you understand exactly how it works.
đŁYou may have seen leverage displayed as a multiplier like 10x, multiplying your initial capital by 10. $10,000 leveraged 10x gives you $100,000 to trade, and your initial capital is used to cover your losses. Once your capital runs out, the exchange liquidates your position.
đŁLeverage trading can be used irresponsibly. It has a much higher risk, so make sure to carefully study Coin-Margined Futures and USDT-Margined Futures to understand the risks fully.