This is a frequently asked question. Today we won't discuss the market but will talk about some 'dry goods.'
Before answering, let’s first understand what a 'perpetual contract' is. It is essentially a type of contract without an expiration date, theoretically allowing you to hold a position indefinitely as long as you don’t get liquidated or close the position. For this reason, it has become the preferred tool for many traders.
So the question arises: what is a 'reasonable' leverage size?
Yesterday, when I was discussing contracts with a friend, he said he generally likes to open 30 times, 50 times, or even tried 100 times. In fact, this kind of thinking is very common among retail investors: using minimal capital to bet on maximum volatility. But the real question is not 'how many times is the risk high,' but rather—are you prepared to handle risk management plans under any leverage?
Let's take BTC as an example:
The current market price is around 116000U, and a 1x leverage contract requires 11600U margin;
Opening 10 times requires only 1160U;
And 100 times requires less than 116U.
From a cost perspective, the higher you open, the lower the threshold, which seems tempting. But the key is: as long as you use leverage, regardless of the multiple, it is essentially borrowing money to trade, just with different speeds of risk release.
Rather than obsessing over how many times, I suggest everyone think: how much capital do you have to bear the consequences of failure? Have you set your stop-loss point? Have you enabled the isolated margin mechanism? Have you done a reasonable position allocation?
What is the most taboo operation in contracts? Holding onto a losing position.
When the market is volatile, even a small pullback can completely wipe out a high-leverage account. What’s worse is that once it’s wiped out, no matter how good the trend is, it has nothing to do with you anymore. Therefore, we emphasize: appropriately increase margin, timely stop-loss and take profit, and set daily profit targets.
Don't underestimate these seemingly 'conservative' operations. For example, if you have 5000U of capital and steadily earn 2% profit daily (100U), you will have 2000-3000U in earnings in a month. This is much more reliable than betting everything to make big money in one wave and then losing everything in the next wave.
To summarize my advice:
Leverage is not better when it's larger; it should match your capital and trading plan.
Try to use isolated margin mode to effectively separate risks;
The stop-loss and take-profit mechanism must be strictly enforced; profitable trades = successful strategies + good mindset;
Don't be greedy or get carried away; having a 'small goal' each day is enough;
Don't fantasize about getting rich overnight, and avoid consecutive liquidation.
Lastly, a reminder: contracts are essentially tools that amplify profits but also a double-edged sword that amplifies losses; using it wisely is an aid; misusing it is a sharp blade.
I hope today's sharing can help you be calmer and more rational on the path of perpetual contracts, reducing detours.
