Trading · 63 / 86
Leverage, margin, and liquidation
Leverage means you control a larger position than the money you put up. A small move against you is magnified. Past a line, the position is closed for you.
What borrowed size does
With ten times leverage, a move of a few percent can wipe the margin you posted. The chart can look calm and still cross that line.
Not a how-to
This course will not tell you how much to lever or where to put the line. It will tell you the venue keeps the right to close you, and it charges for the privilege.
If you cannot name the liquidation price in money, you do not know the trade.
Check yourself
Does leverage make a good idea safer because the gain is larger?
No. It makes the loss larger at the same speed.
After this you can name the price that wipes the margin, in money, before you add leverage.