Topic: Trading Leverage - page 3. (Read 926 times)

At the risk of repeating myself:
Leverage is only needed - and should only be used - in forex trades. However, trading platforms for forex support significantly higher leverage than x5 or x10, sometimes even x500. The reason for this is simply that the daily fluctuation margins in forex trading are so small that you need such high leverage to avoid having to invest huge amounts of capital.

However, this factor does not apply to Bitcoin or crypto in general, where the daily fluctuations are already so enormous that trading without leverage is already worthwhile with small positions ... or not.

Absolutely right, exchange market want to get more higher fees trading trough leverage and each time transaction with short or long position opening has bigger fees than spot trading or without leverage. Get maximum leverage give more bigger fees for exchange market and your explain 100% correct how many exchange added many new coins in future market listing.
Get small fees with manual trading or spot trading without use leverage, but when trader try with that feature market get much benefit with trading fees except still has funding fees when position up to 8 hours without get close. Much fee transaction earned by exchange market with their exchange have leverage or future trading feature, I don't think with this kinds of trading will close by market in the future except some local exchange market still not allow with this feature seems their government regulation.

Leverage trading didn't start with crypto trading, I don't understand why we see it as big deal been utilized by exchange. We have leverage and margin options on brokers that provide forex trading to many customers and they are satisfied. The only problem here in crypto is that a lot of exchanges knows that traders love high leverage because they are too greedy that's why you see leverage as high to 25x when on brokers you will see a max of 5 to 10x on regulated brokers.

We still have some leverage exchanges thag provide as high as 125x leverage for traders to use and when you check those exchanges, you will see activity of traders going on live, this is to tell you that many traders love gambling on leverages rather than doing normal trading, so don't blame the leverage platforms, blame the people who go their to trade.

Good risk planning and management will likely produce good results. No trader is 100% successful without sacrificing time and money in the learning process, in fact they have to fall and fall before finally getting what they want.

Of course there is a lot of knowledge and advice that we need to consider from other users' experiences, it will definitely help us grow better. There is a long process before finally being successful, and each process will not always be easy. Market dynamics basically teach us to remain wise in making decisions, regardless of whether we are investors or traders.

I do agree that it is not clear with just small samples and we can't really make a big distinction out of this situation in the end. We need to make sure that we are hearing what people are saying of course and we help every person who comes to us with help, but that doesn't mean that we are going to end up with anything greater or bigger and our small sample size is not going to be the decision maker neither.

We just need to make sure that we are just seeing this as what it is, it is going to be just what our friends or so could make. That is why I believe that we are going to end up with anything major, it has to be the most important part and could definitely end up with just seeing what we could have done that eventually.

Trading leverage might work if you have high experience on trading using leverage, but if you’re still new to it, you have to stick with risk management as it’s very crucial in trading, hence trading with leverage is highly discouraged for beginners. Don’t trade and focus on greed, you will never be successful and profitable in that case, but if you trade with an average amount of capital slowly but surely, then expect that you will have something to profits at the end of your trade.

Oh I see but 1x leverage still seems to be small and may not something to worry about about. If it's only about earning a quick profit, trading without using leverage is possible but they can use leverage in order to enhance those minimal profits that they can get.

I wouldn't say it's an addiction but this is only normal in trading because price volatility is always there but it can be called as greediness once a trader uses more leverage and capital to trade. It is risky even if we say they are skilful and losing is also normal even on a regular trade because once they lose it, it can badly affect them not only financially but also mentally, physically, etc...

You are wise this way and there is nothing reasonable to compare there still, as leverage (trading) and gambling are not just the same thing. In gambling, you may increase the risk of your bets, and the same is true in trading, you may increase the risk of your trading, that's the only sense they correlate here, it is all about your risk affinity only. But for the operation itself (trading and gambling), they are just different in every aspect because if you are trading, you are actually engaging in a business, it now depends on how good you are with the business since it is a very risky business.

But for gambling, you are not engaging in any business but a form of betting which will not be able to sustain you no matter how good you are, or how good you believe you are in doing it. From a point of view, I've seen enough traders on the street, they are tactical and consistent about it. And if you check social media today, you see lots of them that rely on it alone and are big boys openly who started with a small amount. Can you tell of gambling the same way? Certainly No. This is a little hint that they are not just the same thing. And if you know how to play with your leverage very well, you get more earnings in trading through it, but it becomes an issue if you are gambling on the high leverage when you are not a good trader.

Of course, you can't draw conclusions from just one or two people who come to you and show interest in futures trading. So far, 10/10 people who come to me are those who are interested in spot trading as well as investing, but just as I said, I can't make the right conclusion that spot trading is more interesting than futures trading.

The logical reason why futures trading attracts so many beginners is its profit potential. But unfortunately, beginners focus too much on profits while many of them ignore the high risk of loss. It might still be fine if they learn from a mentor, but things will be bad if they come with all their budget and make big mistakes because they are interested in other traders' profits.

however, futures trading is very popular with traders, especially new traders. for some reason, their interest is in futures trading rather than spot trading. I don't have that data, but from the few people who come to me, there are more of them who are interested in trading with Leverage. they consciously know the risks are higher but they think their chances are also high.
Perhaps because of the large amount of interest that exists, that is what prompted the exchange to be very serious about developing and offering futures trading. they make huge profits from futures trading.

In futures trading, leverage is needed to double profits for a trader. The lower the leverage, the lower the risk borne by a trader, while the higher the leverage, the higher the risk of losing money when prices fluctuate.

Futures trading is never suitable for those who rely solely on luck, but futures trading is for those who are truly able to analyze the market and are skilled enough in risk and emotional management. Futures trading is tempting because of the possible returns, but carries a high risk of losing money if it is not supported by a strategy and starts with greed.

I think it is still quite normal for the exchange to still make its offer with something because leverage itself is a form of great control that is had in a trade so in trading this can always happen even though some people consider it to be a bad deal. Because anyone can see that if someone is able to control the market, it will definitely be easy to achieve profits even though it is not determined by when the time comes. And when the exchange offers it to many traders, it will also be more profitable for the exchange in terms of any fees received from traders with an amount that may be quite hefty.

Yes and no. Exchanges are not entirely innocent here ... You have to look at where leverage trading actually comes from. Leverage is used as standard in forex trading (EUR vs. USD, ...) because the price movements there are so small that without leverage you would have to bet incredibly large sums to be able to make any noticeable profits at all.

The fact that leverage is now also offered in a market that moves significantly on all time frames (low and high) is neither necessary nor, in my opinion, sensible at all. It simply looks to me like exchanges are using this to take money out of customers' pockets even faster.

On the other hand, customers are of course entirely to blame if they use leverage and lose money.

This your question somehow sounds ridiculous because you as a person should have known that the exchange you are using to trade don't give a f**k if you are losing or not, what is more of a concern to them, is how much they can make, so the leverage will always be there, and mind you, leverage is not a bad thing in trading, if it's been used properly.

Me as a person, when am trading, I don't use more than 3x leverage you know why? Because over leverage is the easiest way to get liquidated, but if you are knowledgeable enough in the craft, you will definitely not abuse the the privilege of having access to leverage, because in as much as it is been used to double up our margin, it can also be a trape, if you don't know how to use it properly.

Why do exchanges offer them? Because they get more in trading fees.

If someone has $100 and the exchange fee is 0.1% the exchange gets $0.10 for a trade. Since they need to exit the trade, eventually it’ll be another $0.10 bring the total to $0.20

But if they offer 100x leverage, instead of $0.20 in fees, they will get $20 in fees. They don’t care if the user makes money or not, as long as they get paid for their fees.

there's always reason why big fund management out there always priorities risk management, whatever asset they tried to add to their portfolio these big fund management seems to really focused on how to keep the money from losing while also gaining profit which definitely gonna be ignored by most of the investor and trader out there.

when our money is just too low in term of capital just pursuing profit maybe does make sense, it only doesn't make sense when our capital has grown big enough that we actually need to start thinking about how to manage the risk, we already get the advantage of having big capital at that point so profit is not a problem anymore but how can we make our capital remains the same if not growing thats what should be of concern.

leverage is okay, if we only use 5%-ish from our overall capital, it might opens a way to further faster the profit generation but it always comes at risk, as far as I know, trading with leverage, add so much risk to our portfolio if not managed properly just as you stated too bad many people ignore this kind of thing.

Leverage will fall into gambling if you don’t know actually how to trade using leverage, but if you are an expert in trading using leverage, then one should not worry about it. In fact, it will even increase your potential profits and achieve faster your goal in trading, but for some newbies who are still starting to trade, using leverage should always be discouraged as the risk to lose is high and it can instantly vanish all your funds in just a very short time.

Loss and profit are parts of trading that cannot be separated - but when traders have risk management, they can minimize losses by prioritizing strategy over ambition. Greed is often the reason why traders have to accept unwanted losses - they can even fall into the same hole when they don't learn from previous mistakes. High leverage is a trap - don't play around, it will give the trader a high chance of losing all his money.

Risk management is the most important thing in investing and trading - but regarding future trading, risk management may be more difficult because many traders are too eager to get high leverage to get multiple profit. I don't know - I don't like trading futures, it has a high risk of losing all the money compared with spot trading and investing.

Risk management is often ignored by most traders as they do not think that is where money is made, for them studying the ways of opening a position at the bottom and closing it at the top is where the money really is, so they do not want to waste their time in a skill that seems geared towards protecting their capital instead of gaining it, a big mistake without a doubt, but one most traders do not realize they are making until the markets move against them and their capital gets decimated.

In this case it is necessary to look at many elements, because looking at leverage is like a multiplier how it works, it is true that we can see and do research efforts with mathematical systematic analysis of the market, but in practice there is an element of gambling, secondly the most catalytic in my opinion here because trading that has leverage is trading using derivative products from the original asset just like forex products in forex, This I conclude that there is no buying and selling activity on the original goods or the original coin, it's like you put your money and choose your multiplier then you will predict where the market will move, more or less that's how it works and there are many elements of this included in gambling indirectly.