$BTC Leverage is Not a Death Sentence: The Mathematical Survival Rules of Position Management

There is a common saying: Leverage is the grave. However, the true danger is not leverage itself, but uncontrolled positions. A hundred times leverage with only 1% of the principal actually carries the same risk exposure as a fully leveraged one-time position — this is a fundamental risk hedging principle in financial engineering.

The core formula of position management:

Maximum Position = (Principal × Risk Coefficient) ÷ (Stop Loss Range × Leverage Multiple)

With a principal of 100,000 and a 1% stop loss, the upper limit for the position under 20 times leverage is 1,000 yuan. This is a simplified version of the Kelly formula in practice.