Steemit Crypto Academy contest | S13W6 " Leverage in Cryptocurrencies

introduction

Hope everyone is doing well and thanking Allah for his blessings in this last week of season 13. Goodbye to all friends and welcome to all friends. will talk about leverage and take this topic forward. Money is necessary to start any business. I would like to jump into this contest and answer the following interesting question

It's not literally about taking advantage or getting help to get a result from anything or to achieve a goal that you want. So, if we want to lift something heavy, if it requires a lot of power that we know, but even if that power we make something to support it, we get the thing that is. or any heavy machinery is used to lift it, it will lift it up easily, which is why gaining leverage for anything that is a productive or a lever tool is be used which can help me to lift it with less force G.

Silver I use it helps me to lift the object and becomes my power When in machines we use levers we have It turns out that it is a very long and rigid object that helps in lifting and moving large loads from one place to another.

A lever is usually a fulcrum as a device that acts on a pivot point where users apply force from the end where they can lift heavier objects through labor. There are and there is a clear fact in this and this is a good and common example of Quasi. Cryptocurrency is invested through the same method. Profit and loss are both common in cryptocurrency.

Here

People use leverage tools to earn more money. Thus, in the world of cryptocurrency, leverage is what happens. It is for borrowing as I will give you an example that I want to invest $100 but I will need a down payment or borrow from someone to make a bigger investment. I'll describe it like this because I can't afford it alone, I'll have to leverage what I have, I'll have to borrow $900 from somewhere, and so I can trade $1,000.

What is possible for me and one thing becomes clear is that if I get only 10% profit which is what it is, it will be very profitable for me. can earn dollars but now from 1000 dollars I have managed to earn 100 dollars as we know that both profit and loss are possible in crypto currency.

Explain how leverage works

I want to draw your attention to how the lever works and how it works in simple machines and how it draws lines or parallels in cryptocurrency to give you an example of what we know. Cryptocurrency acts as leverage in the market and we know that per sub and the distance is exchanged, meaning that the higher the percentage, the greater the distance and the higher it is, the higher the hypocrite.

Chances are, and more and more, it's become simple, so I can make bigger purchases, like I know what I have is a thousand dollars, but what I'm investing is 10,000 dollars. So now I'm going to use the leverage system because I'm going to need another nine thousand dollars that I have so I'm going to multiply one by 10 and then it's going to be 10 thousand dollars and I'm going to use leverage.

So I will reach this $10,000, if I add my first $1,000 to it, the total will be $11,000, which will be a good amount.

S1000+S(10×1000)S1000±S10000=S11000

Astonishingly my money increased instead of buying 1000 bitcoins I can make more profit by buying 11000 dollars and obviously I can make profit. It will be 1100 dollars which means I had 1000 dollars in the beginning and the additional dollars I received increased the amount by about 100 dollars which means that I got a total profit of 1100 dollars.

Profit ×S11000 =(10/100)×10% 11000=0.01 ×S11000 =s11000

The interest on the loan is 10% per thousand with a net profit of $1100

As I know this is not possible without leverage because without leverage I can earn only $100.

But as we know that if the profit is 10% which is 1100 dollars then in the same calculation if the bitcoin which is 10% decreases then it means that I will lose 1100 dollars. This is how the system works

Leverage in any currency or cryptocurrency works and plays its role

The fact that leverage is used the way it is in the markets is the way it is in currencies is the following reasons that I tell you.

• No1 It is used to increase profits

We know that leverage is potentially used to increase the earnings of traders and leverage means that more people can invest and earn more profit. Profitability plays an important role in making profits.

• No2 Its second function is to create commercial opportunities

It gives traders an opportunity to earn maximum profit in a short period of time, which allows traders to earn more profit in a short period of time and can operate with a small profit. What is is given so that he may succeed as a hypocrite as much as possible and move forward to improve for what is.

Let's say I have 12 thousand USDT in Steem and I am given a leverage of 10 then that would be about 120 thousand USDT in Steem.

12000×10 =120000

I can control the size of the position and explain what is possible and how it can work if I open a potentially long position.
For 45% increase

If the price of Steem increases by 45%, the profit I will make from it is about 54 thousand USDT which will be amazing, in that sense I will accumulate a very long capital and make a very good profit. will take

Profit Loss % investment+ Loan interest

profit=45% ×120000 USDT
profit= (45\100)×120000 USDT
profit= 0.45×120000 USDT
profit=54000 USDT

Net Profit=profit -(initial investmen ±loan investment

net profit 54000 Usdt-12000usdt (12000 scdt

12000×0.1=39000USDT

We can know about the investment which has increased by 330%

If the price of Steem drops by 15%, I can lose a lot of money. They will go and have a significant deduction from my money. He said, "Anxiety will be seen. That's all the calculation is going on and this whole system is running under this system."

loss =15% ×120000USDT

loss=(15/100)120000usdt

loss=0.15×120000usdt

loss=18000USDT

After doing all this I can know that I will lose around 31200 which is 31200 dollars which is a huge amount.

Here

By using Bayana, a trader accumulates a lot of capital in a short period of time and earns a lot of profit in a very short period of time, but if on the contrary it goes into the negative, it means that he went into losses. Go and say against him and almost all the capital of all that is will be lost and what is his own will be greatly lost. This is the only reason that it also has many benefits of a leverage and It also has a lot of disadvantages so be careful with it.

The benefits of leverage are magnified

Leverage can leverage investments, giving traders a lot of profit in a short period of time, and it also allows traders to invest more capital on their own. A lot of profit is made in time and they can consolidate their position and use what they have control themselves. Is

Increase in trading power

Leverage gives traders more trading power and gives them more leverage which stabilizes their power and allows them to invest more capital and trade for more capital. get more benefit from it and businessmen who make their investment more and more so that the motive of the hypocrite takes them further which many times they get a lot of profit which they consolidates the position of and forever opens up to them huge trade opportunities.

Diversification opportunities

It helps the traders to diversify the risks from different assets which allows them to know about their assets and manage their assets on their own account which helps them a lot and This allows them to determine their strategy and increase risks to further stabilize it.

Increase in purchasing power

Leverage gives buyers a lot of power, which allows them to buy a lot of assets and use that power at will, which can increase their purchasing power and increase their assets. It can cause them to do whatever they want.

Increasing damages

We clearly know that just as the statement can increase a trader's money, it can also decrease his money, this happens when the position is against you. If it happens and keeps falling down and starts falling then it will not be beneficial to you but will cause you a lot of loss which is clear from the examples given to you such as the obligation of $100. If you told about the extra money or told something other than that, it means that when it goes against you, now you have to bear a lot of loss.

Increased risk

What is added to leverage is risk taking. We know that when it starts to fall, it goes down. It goes on constantly, sometimes it goes up, sometimes it goes down. It is a kind of risk that sometimes takes you to the top, but many times it can also take you to the bottom. The work of risk is always in it. A lot of risk is taken and when that risk is beneficial to you, then you profit, but when it goes to the downside, now you will have a huge loss that will not be realized.

Margin calls

Traders at this level should take special care of their accounts and they do, when trades go against them and they incur huge losses, an alert call is issued for them. And if they find out then they have to pay the balance or close their account so the system works as it is and if they pay the balance they will go further if they don't pay the balance. What is special about them will be closed.

Risk of explosion

We clearly know that leverage can completely destroy a trader's investment and even close his account completely. This is a special type of its function because when it goes against you, all your capital is lost.

Psychological aspects

We know that with leverage trading, an investor who works for a living, in order to accumulate more capital, takes a certain type of risk, which often results in more capital, but the opposite of capital. can also go away and not save him from losses, but he can also go down a lot.

Conclusion

Finally, let me explain to you that this is a process that goes both ways, meaning that it can give you a lot of profit and it can also give you a lot of losses, it can sometimes go against you. This is why traders should use it especially carefully so that it never goes against you and you don't lose capital.

I like to invite my best friends (professor @kouba01 )@pelon53 @suboohi @patjeell @josepha and @beautiful12 to take part in this contest

Best Regard
@shabbir86