Trading Leverage - page 6. | Bitcointalksearch.org

Bitcoin_Arena

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Quote from: alastantiger on April 16, 2024, 05:12:15 PM

In life, leverage is good as it helps to help us accomplish a goal faster. But in trading, leverage in trading is clearly a bad deal.

The other trader who made massive profits on the otherside would disagree. It's not a bad deal to them. What is a bad deal is your poor trading decision. The money makes it's way to the smart traders from those who made poor decisions. That's how markets work.

The exchanges mostly benefit from the trading fees from all traders using their platform.

South Park

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Quote from: alastantiger on April 16, 2024, 05:12:15 PM

In life, leverage is good as it helps to help us accomplish a goal faster. But in trading, leverage in trading is clearly a bad deal. It messes things up for both the traders and the market. So my question is why do exchanges still offer them. They keep pushing it to traders like favourite snack?

Exchanges earn money by the fees they charge you and the number of people they can bring to their platform, if a person had 1k dollars and they thought this was an amount too low to trade the markets and make a lot of money with it, a thing they will be right about, exchanges do what they can to convince that person to become a trader anyway and use a very high level of leverage, so the person gets convinced about it and becomes a trader, earning additional profits to exchanges they may not have gotten otherwise, so it is clear why exchanges push leverage to their clients, even those that have a reasonable amount of money on their accounts.

EL MOHA

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Quote from: alastantiger on April 16, 2024, 05:12:15 PM

In life, leverage is good as it helps to help us accomplish a goal faster. But in trading, leverage in trading is clearly a bad deal. It messes things up for both the traders and the market. So my question is why do exchanges still offer them. They keep pushing it to traders like favourite snack?

Because exchanges are business platforms and what they are interested in is profit. Leverages are like lended funds to trade yes it is a bit risky but it’s also brings about more profit on a single trade than the one without leverages same as the lose but traders prefer to take the risk of using leverages just to maximize their profits. Any exchange that stops leverage trading now will lose almost all its traders as a customers because it is why many traders are after, in fact most exchanges lure in more traders with their high leverages. So as long trading exits I don’t see leverage been removed

Assface16678

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If you are not experienced in trading, then dont mess with the leverage. Yes, leverage is increasing the potential profit you can have in your trade, but also the risk. If you mess up with leverage, even a slight down trade in your trade might cause your account to be liquidated. Even experienced and expert traders don't use much leverage because they know how dangerous it is and they know that leverage is not the solution for everything or easy money. Remember, in trading, if you take a shortcut and rush things, then expect that you might stumble once, and it will keep on repeating until you learn your lesson. I've tried using leverage, and of course it didn't go well. That's why, from that experience, I never use it again. That feature will never be gone because trading platforms know how greedy a trader is sometimes, and it will benefit them and also the narket.

Oshosondy

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If you have $100 and the exchange has trading fee of 0.05%. In each position you open with 1x leverage with the $100, that is $0.05 as the trading fee of the position you opened.

If you have $100 and use 10x leverage. The trading fee will go 10 times higher. The trading fee is $0.5.

If you go 100x. The trading fee is $5.

Exchanges make money as the leverage increases. The exchanges do not care if you lose or not, what the exchanges care about is the profit they want to make.

alastantiger

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In life, leverage is good as it helps to help us accomplish a goal faster. But in trading, leverage in trading is clearly a bad deal. It messes things up for both the traders and the market. So my question is why do exchanges still offer them. They keep pushing it to traders like favourite snack?

Topic: Trading Leverage - page 6. (Read 926 times)