Leverage works through a cryptocurrency exchange or brokerage granting you the right to trade positions that are multiples of your trading capital.<\/p>\n\n\n\n
You might for example have $1,000 of trading capital.<\/p>\n\n\n\n
If you executed a regular (non leveraged) trade that realised a 10% gain you would make $100 (1,000*0.10) and end up with $1,100.<\/p>\n\n\n\n
If the trade realised a 10% loss you would lose $100 and end up with $900 or 90%.<\/p>\n\n\n\n
With x10 leverage you could execute the same trade, but your $1,000 would act as what is known as a Margin, and you\u2019d effectively be trading with $10,000.<\/p>\n\n\n\n
Now the 10% gain would translate into a $1,000 profit (10,000*0.10).<\/p>\n\n\n\n
However, the 10% loss would result in you losing your entire trading capital – 100% loss.<\/p>\n\n\n\n
Here\u2019s that example demonstrated in a table.<\/p>\n\n\n\n Because of the way that leverage magnifies profit and loss, a leveraged trade will have a point at which unless you add more capital, your position will be automatically closed. This is also known as a Margin Call. <\/p>\n\n\n\n Leveraged trading is popular in markets with low volatility, like foreign exchange markets, because the fluctuations are fractions of a percentage. Despite the fact that cryptocurrency is inherently volatile – by comparison – leverage is available on some exchanges up to 100x, though multiples start at x2 or x3 and move upwards from there.<\/p>\n","protected":false},"excerpt":{"rendered":" Leverage works through a cryptocurrency exchange or brokerage granting you the right to trade positions that are multiples of your trading capital. You might for example have $1,000 of trading capital. If you executed a regular (non leveraged) trade that realised a 10% gain you would make $100 (1,000*0.10) and end up with $1,100. If […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[540],"tags":[],"_links":{"self":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/8702"}],"collection":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/comments?post=8702"}],"version-history":[{"count":0,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/8702\/revisions"}],"wp:attachment":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/media?parent=8702"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/categories?post=8702"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/tags?post=8702"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Long Position – 10% Fall<\/td> Without Leverage<\/td> With Leverage x10<\/td><\/tr> Trading Capital<\/td> \u20ac10,000<\/td> \u20ac10,000<\/td><\/tr> Trade Size<\/td> \u20ac1,000<\/td> \u20ac10,000<\/td><\/tr> Loss from Trade<\/td> \u20ac100<\/td> \u20ac1,000<\/td><\/tr> % Capital Lost<\/td> 1%<\/td> 10%<\/td><\/tr> % Capital Remaining<\/td> 99% – \u20ac9,900<\/td> 90% – \u20ac9,000<\/td><\/tr> % Remaining Balance to Break Even<\/td> 1%<\/td> 11.11%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n