⚙️ Session 5 | Leverage, Margin, and Liquidation (Very Simple) 📌 If you don't understand this session correctly, sooner or later your money will disappear. So read carefully 👇 🔹 What does leverage mean? Leverage means opening a larger trade with less money. Example: You have $100 You use 10x leverage It's like you're trading with $1000 📌 Leverage doesn't create profit It just makes the trade larger So losses become larger too. 🔹 What does margin mean? Margin is your actual money that you put up for the trade. Example: Margin = $100 Leverage = 10x Trade volume = $1000 ❗ Important note: The percentage of profit and loss depends on the price, not on the leverage number. 🔹 What does liquidation mean? If the price moves against the trade and the loss reaches the amount of your margin the exchange will close the trade. This is called liquidation. 📌 This event is automatic and irreversible. ⚠️ Very simple example (important) Assume: 🔹 Margin: $100 🔹 Leverage: 10x If the price moves about 5% against you → All $100 disappears → You get liquidated 📌 The same trade with lower leverage will get liquidated later. 💡 The conclusion you need to understand ✔️ Margin = your actual money ✔️ Leverage = magnification of the trade ✔️ High leverage = shorter distance to liquidation High leverage is not professional; professionalism is risk control. 📘 Simple exercise Open a hypothetical trade and just change the leverage: 2x → 5x → 10x See how much the distance to liquidation changes. #GoldenXAcademy
