Answer:
Leverage simply represents borrowing money in order to fund an investment. For example, when a trader uses leverage with ratio 1:10 (10x) and underlying asset moves by 1% then leveraged asset moves by 10% in the same direction. Leverage is definitely one of the possible ways to generate money fast. However, it is also a quick way to lose money. Leverage trading is highly risky without proper risk management
Should I use a leverage when I am new (unexperienced) trader ?
Answer:
Use of leverage by new traders is pretty common as it represents an enticing opportunity to make money fast. However, in our opinion, an unexperienced trader should not use leverage at all. That is because leverage is very difficult to manage and its use by an unexperienced trader usually results in loss of capital. Inexperienced trader should learn about leverage and risk management first, and they should try leverage with very small funds as practice trades to start leverage trading 🚨
MARGIN LEVERAGE RATIO
Lev 5x : 20% margin
Lev 10x : margin 10%
Lev 15x : 6% margin
Lev 20x : 4% margin
Lev 25x : 3% margin
Lev 50x : 2% margin
Lev 75x : 1% margin
Lev 100x : 1% margin
