Is leverage harmful?
Leverage has both good and bad sides and even then we prefer having high leverage for some additional advantages in trading. Leverage helps a trader takes more risk than he affords and here is the importance of leverage. But it is always wise to use moderate leverage to stay out of risk. Even though LQDFX broker offers me 1:1000 leverage, I stay limited to using 1:100 leverage.
Leverage in forex trading can magnify profits but also significantly increases risks. While it allows traders to control larger positions with smaller capital, excessive leverage can lead to substantial losses, amplifying both gains and downturns in the market. Proper risk management is essential when utilizing leverage.
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