- Avoid trading on margin unless you’re experienced: Some exchanges offer leverage, allowing you to borrow funds to increase your position size. While this can magnify profits, it also magnifies losses. Leverage is risky, especially in volatile markets, and can lead to significant losses if the market moves against you.
- Be mindful of “liquidation”: In margin trading, if the price moves too far in the opposite direction, the exchange might liquidate your position, meaning you could lose your entire investment.
Understand the Risks of Using Leverage