Leverage can double your profits — or drain your funds in seconds. This post explains how it works, when to use it, and how to avoid the mistakes most traders make.
Leverage lets you trade more than you own — it amplifies gains, but also losses.
In crypto, it’s exciting and dangerous. Use it smartly or don’t use it at all.
What is Leverage?
If you use 5x leverage, you control $5,000 of BTC with just $1,000.
That means:
A 10% price move = 50% PnL
But a 20% wrong move = liquidation
Real Example:
You open a 10x long on BTC at $106,000.
If BTC drops just 10%, your entire position is wiped out.
That’s the hidden risk — leverage magnifies everything.
Why Traders Use Leverage:
To increase profit potential
To take short-term trades without tying up capital
To scalp small moves with big returns
But Here’s the Catch:
Liquidation happens fast — you lose everything in one move
It’s not for holding — volatility can kill your position
Most beginners over-leverage and blow their accounts
My Rules for Using Leverage:
1. Never use more than 3x on altcoins
2. Set tight stop-losses and respect them
3. Use leverage only on liquid pairs like BTC/USDT
4. Don’t ever use leverage on meme coins — it’s a trap
Pro Tip:
Even pros use low leverage — because long-term survival matters more than short-term gains.
If you can’t manage risk, don’t touch leverage.
Powerful tool, or perfect trap — it all depends on you.
Follow @mythoughts — no hype, just thoughts.
