Leverage is a double-edged sword in the world of trading. When used correctly, it can significantly boost your returns without requiring a large upfront capital. However, it also magnifies risks, making proper management essential—especially when combined with automated trading bots.

In this article, we'll explore when it's appropriate to use leverage and how to use it effectively, especially when trading with bots on platforms like Risego.

1. Use Leverage When There’s a Clear Market Trend

Markets often move in recognizable trends—either upward or downward. Leveraging during such periods can help traders increase their profits without necessarily increasing their capital.

For example, if your bot identifies a strong bullish trend based on technical indicators and enters a position, using 1:2 or 1:3 leverage allows you to control $10,000 with just $3,000. This can double or triple your return—as long as the trade goes in your favor.

Tip: Avoid leverage when the market is choppy or uncertain. Trends should be confirmed with reliable indicators or strategies.

2. Use Leverage Only With a Strict Stop-Loss

Leverage amplifies both profit and loss. That’s why every leveraged position must have a clearly defined stop-loss to prevent emotional decision-making and major capital loss.

On Risego, you can set stop-loss parameters for each bot to ensure risk is always controlled—even when you're not monitoring the screen.

3. When Your Bot Has Proven Performance

Never use leverage blindly. Make sure your bot has consistent historical performance. Platforms like Risego allow you to:

• Backtest bots with 5 years of data

• View full performance metrics: profit/loss, max drawdown, average win rate

• Simulate trading strategies before risking real capital

If a bot has shown good performance across market conditions, you may consider applying modest leverage (1:2 or 1:3) to maximize capital efficiency.

4. To Optimize Capital Efficiency

Using leverage means you don’t need the full amount to open a trade. With 1:3 leverage, $3,000 can open a $9,000–$10,000 position. This allows you to diversify or keep more funds available for other opportunities.

Final Thoughts

Leverage is not inherently good or bad—it’s all about how and when you use it. With the right bot, a strong strategy, and proper risk management, it can be a useful tool to grow your account faster.

However, misuse of leverage is one of the main reasons traders lose money. So be smart, set stop-losses, and only use leverage when the conditions are right.