Post
Topic
Board Trading Discussion
Re: Why You Should Trade Crypto With Leverage
by
darewaller
on 27/10/2020, 10:59:51 UTC
I read what you posted on that article and you only present one side of the coin, you only present the good aspects that make margin trading attractive and why many people try to use it on the first pace, why do not we talk about the other side, if you lose 10% in a single trade if you leverage that with 10x then you lose all your capital, and if you use 100x then a 1% loss is enough to wipe out your account.
True and the crypto market is so volatile that 10-15% change is normal within weeks and even days at times specially with altcoins because they are even more volatile than bitcoins. But that said if you do a sensible leverage trading and use 3x or 5x at max then actually chances are less that the value will drop as much as quickly and you can see some funds in balance for sudden changes and you can put some extra money when market drops.

I think you are taking the wrong approach here, the question should be who can trade using leverage and do it without destroying their accounts in days or weeks? And the only ones that can do that are expert traders, newbies should stay away from it until they have showed themselves they can make money consistently on the markets and they have a solid money management strategy.
For sure newbies should not even think of leverage trading and one thing that people miss about leverage trading is that you have to pay some interest, although small, to the lender because you basically borrow money from them and you always feel the heat of paying interest so you make rush trades a lot of time to make things happen and one thing everyone must avoid in leverage trading is rush because it can empty all your balance.