I used to use 100x leverage, which resulted in countless margin calls. Now, I'm consistently profitable with lower leverage. What's the reason?

Simply put: Trading on Binance Futures with 100x leverage is like walking a tightrope without a safety rope. The risk is maximized, practically equivalent to "taking a single gamble and losing everything." Let's break it down:

First, let's understand the core point: with 100x leverage, you can't afford to lose even a single fluctuation.

For example, if you buy Bitcoin and open a position with $30,000 USD, the platform only requires a 1% margin (essentially a "security deposit"). However, if the price moves even slightly against your position, your security deposit is gone.

If Bitcoin drops just 4% (from $30,000 to $28,800), your position will be forced to sell, resulting in a complete loss of your principal (known in jargon as a "margin call"). Ethereum is even worse, with a 5% drop resulting in a margin call. The cryptocurrency market is inherently volatile. Bitcoin fluctuates by over 4% daily, making it common for prices to fluctuate. This means if you use 100x leverage, you'll likely lose all your money within a few hours.

Let's talk about even more devastating situations—in extreme market conditions, you could lose even more.

Sometimes, prices can experience a "flash crash" (e.g., a sudden 10% drop). Even if the exchange tries to close your position to stop losses, there might be no takers, resulting in a loss of more than your initial investment (known in trading jargon as a "margin call"), and you'll even owe the exchange money.

Furthermore, if you're trading a small-cap cryptocurrency, even the slightest sell-off by a large investor can cause the price to plummet, leaving you with little time to react and wipe out your position.

Real data: Those who use 100x leverage rarely survive.

Statistics show that those using 50x or more leverage only last an average of two hours, and even less with 100x leverage. Many people think they can "quickly enter and exit" to make small profits, only to lose their money the moment they open a position and the price moves. To summarize: 100x leverage is like gambling your life.

The risk level is a 10 out of 10, so ordinary investors should definitely avoid it. Even if you're lucky enough to win a few times, a single miscalculation can wipe out all your previous profits.

For those who really want to trade futures, beginners should use a maximum of 5-10x leverage, and only use 10% of your principal at a time. For example, if you have 1,000 yuan, use at most 100 yuan to open a trade. This way, even if your position gets liquidated, it won't cause any serious damage.#ETH