Detailed Explanation
Why It Matters:
Magnifies profits (and losses) dramatically — core to futures/perps trading but responsible for most liquidations.
How It Works:
Deposit margin (collateral); exchange lends the rest. Price moves multiply your P&L; liquidation occurs if margin falls too low.
Common Mistakes:
Over-leveraging (use 3–5x max as beginner); no stop-loss; ignoring funding rates.
FAQs
Is leverage safe for beginners? Only low levels with strict risk rules (max 1–2% account risk per trade).
What’s liquidation price? Calculated by entry, leverage, and maintenance margin — always know it before entering.
