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Utilize leverage cautiously in trading from "summary" of Secrets You Never Knew About Stock Market Investing and Trading by Swaminathan Annamalai
Leverage is a powerful tool that can amplify your gains in trading, but it can also magnify your losses. It is like a double-edged sword that can cut both ways. Many traders are attracted to the idea of using leverage to maximize their profits quickly. However, it is essential to remember that with great power comes great responsibility. When you utilize leverage in trading, you are essentially borrowing money to increase your buying power. This means you can control a larger position size with a smaller amount of capital. While this can result in substantial gains if the trade goes in your favor, it can also lead to significant losses if the trade moves against you. It is crucial to use leverage...
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