I tried to understand leverage system - and seems like lack of english knowledge) can anyone explain with simple words?
You using your shares capital for x5 trade risking to lose it?
Leverage is not for shares.
And exchange will not take any risk.
This is for traders when they sell and buy coins.
1. If You think bitcoin price is going up, so you deside to buy bitcoins on the exchange example with 1000$
2. But you are greedy and pretty sure price will go up
3. You look your pocket and there is no more money
3. No problem, alcurex offer you free loan 2-10 times more than you have
4. You deside to take free loan 4000$ (this is leverage 5x) 1000$+4000$=5000$ for trade.
5. You buy bitcoins with 5000$ when BTC price was 500$, so you get 10 bitcoins
6. You was lucky.. and bitcoin price rapidly goes to the moon. Let say to the good old 1000$
7. Then you deside this is the top, you close you trade (Sell your bitcoins)
8. You get 10BTCx1000$
9. First you return you loan 4000$
10. Then you get your original invest 1000$
11. Rest of is you profits 5000$-trade fee (around 10$)
So you grow your 1000$ to 6000$
Your profit is not come from exchage. It comes from other traders who made buy orders.
But... opposite way, if you was wrong and bitcoin price will goes down.
Then you loose your money 5 times faster.
If you 10 bitcoins are losing value more than you original invest (1000$) you lose whole 1000$ if you dont cut you trade.
Simple: It's free loan you can use for trade, but you must pay it back
Why this is big think for share holders is because now share fee is calculated from 5000$ (5 time more fee profits than without leverage)
And margin trade you want to close more fast... and open another...close... open...
So nice for share holders.
