How to use contract leverage?

You often see people using fifty or a hundred times leverage, and it seems like they make several times the money at once. Excluding those who are expert at photo editing, I can tell you that the screenshots are real. (Of course, if someone is a trading god with a few bucks and a hundred bucks, they indeed don't need to edit, as good luck can sometimes yield results.)

But why can others boldly take risks and make huge profits, while when you try, you end up getting liquidated?

In fact, the hundred times leverage we see might not even equate to ten times the actual leverage rate. Using ten percent of the funds to open a hundred times leverage means the actual leverage rate is 10% × 100 = 10. So why still use high leverage?

The key lies in capital utilization! Using 100% of the funds with ten times leverage means all the money is in the market. If you want to increase your position, you are powerless. However, using 10% of the funds with a hundred times leverage, while the actual leverage rate remains the same, allows you to reserve 90% for increasing your position, thus elevating capital utilization without changing the risk.

So how much leverage should you use? There is no fixed answer!!! Leverage should allow your funds to remain fluid, and sufficient utilization is all that matters. The amount of positions should not be determined by the leverage multiplier but should depend on your actual stop-loss. If your long position's stop-loss is set to a hundred points down, and a hundred points drop represents a 2.5% decline, then controlling the total capital loss for this position to 5% means the amount should be twice your capital. If you are using ten times leverage, then you still have an eight times capital surplus available for other trades or averaging down, which is enough.

To summarize: Higher leverage is not necessarily more exciting, nor is lower leverage always safer. The real core is our ability to control risk, rather than the pursuit of multiplier thrills. This is an amplifier; if the mindset is wrong, it will amplify losses; a clear mindset is what helps improve efficiency. Don't blindly follow screenshots, and don't just imitate so-called 'big shots'. Understand the principles and learn to calculate to survive longer in trading.

Regarding the use of leverage, I believe many skilled traders can make money without such rigor. I wish everyone profitable trades and a swift path to relaxation!