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  • mrigank_shekhar04

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    8 months

    Beginner question on why leverage isnt 'meant' to be used long term.

    Iv been trading for a little over 6 months, and learned about leveraged trading. From how what I understand, it allows me to amplify both profits and losses when trading CFDs, in the form of a loan from a broker. I came across a lot of information when looking into it a little bit that basically suggested that leveraged trades are very short term, but I don't really get why you wouldn't use leverage on long term trades, especially if there are no fees involved? For example, if I am pretty much certain that VOO is going to rise in the longish term, why would I not use leveraged trades to increase exposure / profit? I wouldnt be using very high leverages, such that small fluctuations could cause my position to close, rather I would use something like 5x for example.
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