What are the main risks of leverage trading compared to spot trading?

Leverage trading amplifies both profits and losses by borrowing funds to trade larger positions than you could with just your own money. If you use 5x leverage and the market moves 20% against you, your position is completely wiped out. In spot trading, you only risk what you invested. The biggest danger in leverage trading is liquidation—when losses exceed your collateral, the exchange automatically closes your position, locking in losses. You also pay interest on borrowed funds and face funding rates on perpetual futures. Leverage trading requires constant monitoring and strict risk management. Beginners should avoid leverage until they understand market mechanics and develop solid trading strategies.