Discover the benefits and risks of using leverage in trading. Learn how leverage can boost your profits but also increase your risks. Find out the best practices for safe trading with leverage.

Welcome back and learn into a crucial aspect of trading: leverage. Understanding the role of leverage is essential for making informed decisions and optimizing your trading strategy. In this post, explore the benefits and risks of leverage, equipping you with the knowledge to navigate the markets more effectively.

What is Leverage?

Leverage is a powerful tool that allows traders to control a larger position with a smaller amount of capital. It works by borrowing funds from a broker to amplify trading power, enabling traders to enter larger positions than their account balance would otherwise allow.

Leverage is expressed as a ratio, such as 1:100, indicating the multiple by which a trader can increase their exposure to the market.

If a trader have $ Rs. 1000 as margin in his/her trading account and getting 1:100 leverage, then the trader take position upto $ Rs.100,000.

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