Never underestimate leverage

The other side of leverage.

Leverage is one thing that can magnify your profits especially if you have a small account and you want to hold big positions but we are all aware that the possibility of you making profits in the market has equal chances as making losses.

So as you are looking forward to making high profits using leverage, you should bare this in mind that anything can happen and the situation turns around. What do I mean?

Leverage can also magnify your losses in case a trade goes against you. And when that happens, the broker will still have to be paid on spreads.

The accumulated loss on your account plus the spreads increase more risk to your account balance and it may end up being wiped away.

Yes, leverage gives you great opportunities to trade any size you want but you must be careful and aware of what may happen in case things don’t work out as expected.

If you choose to trade using leverage, choose currencies with low spreads and don’t use a big leverage on long-term trades and stick to your trading rules.

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