What is the difference between leverage trading and margin trading?

Leverage and margin trading are closely related but slightly different. Margin trading lets you borrow funds from an exchange to trade with more money than you have. For example, with 2x margin, you borrow $1 for every $1 you own, doubling your buying power. Leverage trading is broader—it includes using borrowed funds across various instruments like futures contracts. The key difference: margin trading typically uses spot markets (buying actual assets), while leverage can apply to futures, where you don't own the underlying asset. Both amplify gains and losses. A 10% price drop with 10x leverage means a 100% loss of your initial investment. Most beginners should avoid these strategies due to liquidation risk, where positions automatically close if losses exceed your collateral.