In addition, many people simply understand that if leverage is large, the profit and loss will expand accordingly, so understanding leverage is risky. Actually, this is not right. It is also a common mistake in many first-time contact margin transactions (foreign exchange, gold).
Leverage only determines the amount of margin. For example, if the current gold price is 1300 and the primary contract value is 100 ounces, then the primary contract value is 13W. If you use 100 as leverage, then you need to take up 1300 as margin. If it's 200 levers, it's only 650 dollars per hand. If the principal is unchanged, the more the deposit is occupied, the less the available deposit is. The higher the leverage, it will give you the illusion that the available margin of the account is sufficient and it is easy to keep adding positions. This leads to the increase of risk coefficient.