Using 2x, 3x, and 5x leverage for low-risk trading

Leverage is a double-edged sword. It increases profits, but also losses. Low leverage values (2x, 3x, 5x) seem to help find a balance between rise and risk. Let's figure it out.

1. What is good about low leverage

Less leverage means a smaller position relative to margin. Liquidation is no longer so scary. The account becomes stronger, withstanding market fluctuations. This is especially useful for beginners. You start with 2x or 3x – and the risks seem to be not so big.

2. How to Manage Risks

Stop-losses are absolutely necessary. No options. You shouldn't put all your capital into one trade. Let's say you use 20% with 2x leverage instead of all 100%. That makes sense, right?

Choose assets with normal liquidity. Wild price fluctuations can simply kill a position.

3. Risk reduction with different leverage

With a 2x leverage, a margin of 50% is needed. If the price moves by 1%, your result is 2%. It seems perfect for long-term positions.

Leverage 3x requires a 33.3% collateral. Every percentage move in the market is 3% of your account. Not bad for the medium term.

5x – this is already more serious. A 20% margin, movements increase fivefold. Maximum of "low" leverage values. Not everyone will find it suitable.

4. Example from life

You have $1000, using 2x: Opened a position of $2000. The market rose by 5% – your profit is $100. It fell by 5% – you lost the same $100.

The same situation applies to 5x: profit or loss is already $250. A significant difference for the wallet!

Financiers in 2025 seem to advise newcomers not to exceed a leverage of 1:10 in any markets. For a calm start, it's better to use 2x or 3x. Although no one knows for sure which approach is ideal. Just trade wisely.