Margin Trading Explained

Margin trading allows you to trade with borrowed funds, amplifying both profits and losses.

How It Works

• Borrow funds from the exchange
• Use leverage to increase position size
• Pay interest on borrowed funds
• Risk liquidation if price moves against you

Leverage Ratios

• 2x: Moderate risk
• 5x: Higher risk
• 10x+: Very high risk

Risk Management

• Use stop-loss orders
• Never use maximum leverage
• Monitor positions closely
• Understand liquidation prices