Do you want to know how leverage negatively affects your trades?
To make a profit, you need to understand that you increase the leverage while at the same time increasing the liquidation ratio.
This means that with a leverage of x2, you divide 100% by 2, which gives us 50. This is the safe distance percentage before liquidation, meaning you are narrowing it on yourself.
A leverage of 20X gives you a liquidation ratio at a distance of 5%, meaning you have consumed 95% of the safe distance to liquidation; any price drop of 5% will lead to liquidation. The higher the leverage, the greater the risk.
You can feel it by dividing the total percentage, which is 100%, by the leverage number; you will get the liquidation ratio at a certain distance. I wish everyone to stay away from any leverage until you feel mentally at ease. Income comes with patience, and persistence is not about taking risks and dreaming.
