Cryptocurrency Q&A
Why is leverage so risky?
Why is leverage so risky?
Emanuele
Thu Nov 28 2024
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5 answers
960
Leverage is considered risky because it involves borrowing funds to increase the potential return of an investment, which also magnifies the potential losses. If the investment performs poorly, the investor may face significant financial losses, including the possibility of losing more than the initial investment.
5 answers
benjamin_doe_philosopher
Sat Nov 30 2024
Leverage in trading involves a heightened level of risk.
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DigitalLegend
Sat Nov 30 2024
When employing leverage, the potential for both profits and losses is magnified.
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Valeria
Sat Nov 30 2024
This means that even small market movements can result in significant outcomes.
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EtherWhale
Fri Nov 29 2024
If a trader uses leverage and the market trends in the opposite direction, the losses incurred per pip will be more substantial.
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Bianca
Fri Nov 29 2024
In contrast, without leverage, these losses would be relatively smaller.
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