đđžMargin trade
Margin trading is the execution of transactions on the exchange using leverage. It represents the conclusion of transactions using borrowed funds issued against the security of a certain amount-margin
đThe leverage itself ('leverage') is a service from a broker, which is a loan provided to a trader to conclude a transaction. The size of the loan can exceed the amount of the trader's deposit several times, allowing him to conclude transactions that he would not be able to do with his own funds alone.
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Opportunities
For many traders who do not have significant equity of their own, leverage is a way to feel more comfortable in the market. Leverage gives:
âȘïžAccess to large deals and the ability to make good profits
âȘïžOpportunity to increase your own deposit several times in a short time
âȘïžThe right to place bets that exceed financial capabilities
đŽRisks
Despite the significant advantages, margin trading has its own pitfalls that can turn opportunities into disadvantages:
âȘïžB in the case of unprofitable transactions, the losses will be very heavy, high potential returns are directly proportional to the same high risks
âȘïž Perceiving a loan as real money, a trader does not learn to manage capital
âȘïžWhatever the transaction is wrapped around - in any case, this broker's shoulder should be restored
đLeverage is a good financial tool for those who have already learned how to manage capital and have a low percentage of unprofitable transactions, but remember that in the hands of an inexperienced trader, it can lead to a complete loss of their own funds