In the crypto market, the relationship between leverage multiple and liquidation is a hard-core issue; you cannot simply say 'how many times won't lead to liquidation' because it depends on your capital amount, position management, market volatility, and stop-loss strategy. However, I can help you break it down so you can calculate the suitable multiple yourself, to avoid the pitfalls of liquidation.

Core logic: Leverage, position, and volatility

Leverage multiple

The higher the leverage, the more money you borrow, the lower your margin ratio, and the worse your ability to withstand volatility. For example:

- 10x leverage: You only use 10% of your capital, and if the price drops by 10%, you will be liquidated.

- 100x leverage: A 1% drop and it’s gone.

Position size

The results of going all-in and splitting positions are vastly different. For example:

- Full position 10x leverage: A 10% drop leads to total loss;

- Half position 10x leverage: Can withstand 20% volatility.

Market volatility

In the crypto market, a daily fluctuation of 10%-20% is common, and high volatility can even reach 50%. You need to choose the appropriate leverage based on the historical volatility of the target coin.

Calculation formula: Downside space = 1 / Leverage multiple

- 5x leverage: Downside space = 1/5 = 20%, a 20% drop results in liquidation.

- 10x leverage: Downside space = 1/10 = 10%, a 10% drop results in liquidation.

- 20x leverage: Downside space = 1/20 = 5%, a 5% drop results in liquidation.

- 100x leverage: Downside space = 1/100 = 1%, a 1% drop results in liquidation.

But this is just a theoretical value; in practice, there are also fees (generally 0.04%-0.06% per order) and forced liquidation lines (exchanges will liquidate in advance, for example, if the margin is down to 2%, they will force liquidation). Therefore, the actual downside space is smaller than the theoretical value.

Practical advice: How much leverage is appropriate?

Beginner

- Don’t exceed 5x leverage: The crypto market is volatile; a 10% drop in BTC in a single day is normal, 5x leverage can withstand a 20% fluctuation, giving you some reaction time. Control position at 30%-50%, don’t go all in.

#### Veteran

- 10-20x leverage: The premise is that you have strict stop losses (for example, run away if it drops by 5%) and risk control discipline, and you can read the market trends. Position suggestion: 20%-30%.

Gambler

- 50x-100x: This type of play purely relies on luck, suitable for small capital aiming for doubling, but 99% of people will be liquidated. Don't use living expenses for this.

For example

Assuming you have 10,000, trading BTC contracts at a current price of 60,000:

- 5x leverage: Open a position of 0.833 BTC (worth 50,000), if it falls to 48,000 (a 20% drop), it will be liquidated. BTC rarely drops 20% in a single day, so it is relatively safe.

- 10x leverage: Open a position of 1.667 BTC (worth 100,000), if it falls to 54,000 (a 10% drop), it will be liquidated. A sudden drop and it's gone.

- 100x leverage: Open a position of 16.67 BTC (worth 1,000,000), if it falls to 59,400 (a 1% drop), it will be liquidated. Just a small K-line fluctuation and you’re gone.

Survival secret

1. Small position trial: Start with 1%-5% of your funds to try high leverage and get a feel for it.

2. Stop-loss and take-profit: Set clear points, such as running away if it drops by 5%, and walking away after making 10%. Don't be greedy.

3. Choose leverage based on volatility: Major coins like BTC and ETH have less volatility, starting at 10x is fine; altcoins have more volatility, and even 5x should be approached with caution.

4. Don't chase highs and sell lows: Emotional trading under high leverage is equivalent to suicide.

Bottom line

To avoid liquidation, the lower the leverage, the better; below 5x is a safe zone for beginners. However, contracts are essentially gambling, and the risk of liquidation always exists. The key is whether you can bear psychological pressure and capital drawdown. How much capital do you have? Which coin are you planning to trade? I can help you calculate a specific plan.

Trading principles

There’s a very important principle in trading: **Don’t make small profits, and don’t take big losses**. It sounds simple, but it’s actually very hard to achieve. For example:

You have 20,000, and after opening a position, it rises to 21,000. You are very happy, take profit, and earn 5%. As a result, the price keeps rising to 25,000... You made 5% but missed out on 50%. Then you tell yourself you want to make big money, so this time you definitely won’t take profit, only to see the price drop back to 20,000 and even dip to 19,500, forcing you to stop loss.

Many people spend their whole lives in this dilemma, constantly switching and having difficulty getting out. Is there a way to make money in both large and small markets? No, you have to choose one; I generally choose not to make small money.

Trading mentality

Whether you are trading short-term or long-term, if you make 200% in a big market, as long as you can maintain most of the profit, when you encounter a big opportunity again, you can earn another 200%, making it 4 times... as long as you can preserve the profit, it can compound. If you make 200% this time and then lose it all back, what’s the point?

Some people may feel they have found the right path and think they are about to get rich. Finding the path only indicates that your probability of making money has increased. This type of operation requires a high level of mentality, patience, and courage:

1. Are you willing to patiently wait for a good position?

2. When the profit of the hanging combination is stable, would you dare to reinvest the profit and continue to hold?

Trading misconceptions

Many people have misconceptions about trading, such as believing that small capital should do short-term trading to grow the funds, which is a complete misconception. This thinking attempts to exchange time for space, hoping to get rich overnight. Small capital should actually focus on medium to long-term trading to grow.

Assuming you have 30,000 in capital, you should think about how to triple it in one wave, and then triple it again in the next wave... that way you can reach 400,000 or 500,000. Instead of thinking about making 10% today and 20% tomorrow... that will eventually lead to your downfall. Always remember, the smaller your capital, the more you should focus on long-term trading, relying on doubling through compound interest to grow, not short-term trades for small profits.

Correct risk control

Many people think their liquidation price is XXX, and they are not worried because they are using 2x leverage and their liquidation price is XX. But when facing market situations like 312 or 519, it’s gone, right? Why mention the liquidation price? Is the bottom line of trading aiming for liquidation? The future is unpredictable; it’s all about probabilities. What if you get liquidated, isn't that a total loss?

The correct approach should be to set a small stop loss or not to lose money as the bottom line, rather than opening a position and looking at the liquidation price thinking it’s safe. A small probability does not mean a probability of zero; otherwise, when you encounter a situation like 312, any leverage will lead to a loss.

The frequent issue of being stopped out can be resolved with the right mindset, instead of just using an all-in mode and setting a distant liquidation price without care. I can write such content because I have also experienced these mistakes and summarized my experiences. I hope this information helps you.