When discussing the leverage multiples of perpetual contracts, many cryptocurrency friends have experienced choice paralysis—how much leverage should one use to neither waste opportunities nor protect the principal?
Let me give a metaphor to new friends: perpetual contracts are like a never-ending car race; as long as you don't get liquidated, you can keep going. But the steering wheel is in your hands; how much gas (leverage) you apply directly determines how fast you can go and whether you'll crash if you skid.
Yesterday, I met a cryptocurrency friend who said he is used to using 30x or 50x leverage. Taking Bitcoin as an example, 30x leverage requires a margin of 16 U, 50x needs 10 U, and 100x only needs 5 U. My advice to him was: if you dare to play with leverage, don't waste this tool—go straight for 100x.
Someone will definitely jump out and say: '100x risk is too high! 1x is much more stable!' But have you thought about it? Since you've chosen the leveraged track, both 1x and 100x bear 'leverage risk', but the returns are drastically different. At 1x leverage, one Bitcoin contract costs over 470 U; even if the market rises slightly, after deducting fees, you might end up losing money; but with 100x leverage, the same fluctuations can amplify returns instantly—since you're going to take risks, why not use the tool to the fullest?
However, there is a big premise here: don't throw eggs against rocks. I've seen too many people who, with just a few U, dare to use high leverage, and when the market shakes slightly, they get liquidated. By the time the real profit opportunity comes, they've already been cleared from the market. So the key to high leverage is to have enough margin prepared—just like checking the fuel tank before a race, you need enough fuel to withstand the bumps.
Experienced traders understand that holding onto losing positions is a big taboo. Don't hesitate to cut losses when necessary; use a position mode to lock in risks to protect your principal. In fact, when it comes to trading contracts, it's not about how bold you are, but about discipline: set a small daily target, like making 50-100 U and then stop. Think about it, with a 5000 U principal, if you make 50 U every day, even if you only achieve this for 20 days in a month, you can steadily take 1000 U—small accumulations are much more reliable than betting big.
Ultimately, there are no absolute reasonable leverage multiples, but there are absolute rules: use high multiples with sufficient margin, take profits when you see gains, and don't be greedy; stop-loss when necessary and don't linger in battle. If you can do these few things, no matter how much leverage you use, you can run a few more laps in the perpetual contract track.
Follow me, Star Brother's knife is faster than the dog dealer! I'll teach you how to cut against the market!
