So i am dabbling into trading again and i have a question about leverage. i was wondering if you start out with 100 dollars starting balance and you use 10 leverage and you manage to blow your account, are you liable to pay the full 1000 dollars that leverage gave you? Or you do just lose your initial starting balance?. I am not sure how this works please clear this up for me thanks.
It doesn't work like that. If you have one hundred dollars and you take 10 leverage, then when you open a deal, your position increases by 10 times, and not the deposit. Further, if you close the trade, the exchange immediately takes all the credit money from you and leaves only the available balance + profit if you managed to earn it. If you think that trading with leverage is just an increase in your deposit on the exchange by 10 times, which you can then distribute among different assets, then this is not so. Leverage works only within one trade, it is given and taken away within one trade as well.