How to Trade Crypto with Leverage: A Beginner's Guide
How to Trade Crypto with Leverage: A Beginner's Guide Leverage trading in the cryptocurrency market can be a powerful tool for amplifying potential profits, but it also comes with significantly increased risk. This comprehensive guide provides a step-by-step introduction to crypto leverage trading, covering the fundamentals, risks, and best practices for beginners. What is Leverage Trading in Crypto? Leverage trading, also known as margin trading, allows you to control a larger position in a cryptocurrency than your actual capital would normally allow. Essentially, you're borrowing funds from a broker or exchange to increase your trading power. The ratio of borrowed funds to your own capital is called the leverage ratio. For instance, a leverage of 10:1 means you can control $10 worth of cryptocurrency for every $1 of your own funds. How Leverage Works Imagine you have $100 and want to trade Bitcoin (BTC). Without leverage, you can only b...