Why is it always emphasized that when trading contracts, you must avoid high leverage! Whether you trade or not, make sure to read this carefully, it's packed with valuable insights!!!

High leverage, from a trading perspective, amplifies profits, but at the same time, risks increase exponentially—a point that many people overlook as they focus solely on profits. At the same time, it amplifies human desires, the pathological mindset of becoming rich overnight or making a one-time big profit is something most people have, which leads to chasing highs and selling lows! Most importantly, with high leverage, the profit and loss fluctuation for a single point is too large, exceeding the psychological expectations of most people. The mind cannot handle such large fluctuations in profit and loss for a single point, leading to a change in mindset during the holding period. This can result in entering a position that may be correct, but you cannot hold it. You might even prematurely exit and take the opposite direction, turning a position that should be profitable into a loss due to psychological influences—this is something that anyone involved in trading has likely experienced!

For example, in this recent pullback washout! Bitcoin has pulled back nearly 7000 points, and Ethereum has pulled back 600 points! If you had leveraged high during this time, you definitely couldn't withstand it. Even if your position can endure the fluctuations, your mindset absolutely cannot, as the profits and losses far exceed your psychological expectations. Your first thought is about cutting losses, rather than averaging down or waiting for a reversal! On the other hand, low leverage allows you to keep a clear mind, viewing each round of downturns or upswings correctly, unaffected by emotional states! You can determine where to stop loss and where to add to your position, not driven by emotions, but through analysis! In summary, high leverage is emotion-driven, dominated by luck, while low leverage is rationally driven, dominated by skill! People can only earn money within the limits of their understanding; the profit earned is proportional to the cost incurred. Leverage amplifies not only profits but also risks! There are many opportunities in the cryptocurrency space; surviving is more important than making profits. Perhaps in the future, hundreds or thousands of times the returns will emerge from you~ Let's encourage each other!

This long position with 125x leverage is one I opened gradually, because I am very clear in my mind that it was the right time with high certainty! The image shows my Ethereum long position, where I averaged down with low leverage, and I am now in profit!