Introduction

Leverage allows you to open a position that is larger than the balance of your account. Suppose you fund an account with $5,000. Using leverage, you could open a $10,000 XBT/USD position with this account (long or short). If you close this position for a 20% gain, your account balance will grow by 40% ($2,000). This amplified upside potential is why traders find leverage exciting.

Leverage is a very powerful tool because it can amplify your gains. But it's also dangerous because it can amplify your losses as well, and even wipe out your account if you aren't careful. Opening a leveraged position should be considered a short-term trade, not a long-term investment. Also, sensible risk management should be employed when using leveraged positions: you should set both a stop to limit loss and a profit target for every open position. Before using leverage please take time to fully understand it and the risks involved. Leverage and its related concepts are explained below, but if you have further questions, don't hesitate to ask. There are a lot of concepts to learn, but this is your money at stake, so it's worth your time to walk through everything carefully.