Leverage is risky. If traders manage their capital well, it can be safe. Leverage does not cause great losses for traders. A trader who manages their money well will not suffer a big loss. Risk management is essential before trading at high leverage.

Leverage involves borrowing funds to amplify investment returns, but it also significantly increases risk. While successful leveraged investments can lead to substantial profits, they equally magnify potential losses. This is because investors must repay the borrowed capital regardless of the investment's performance. In volatile markets, leverage can exacerbate losses, potentially exceeding the initial investment and leading to substantial debt. For instance, a small decline in asset value can trigger margin calls, forcing investors to sell assets at a loss to meet lender requirements. Thus, while leverage can enhance gains in favorable conditions, its use demands careful risk management and a thorough understanding of market dynamics to avoid severe financial repercussions.