At 2 AM, a frantic phone call rang out: “The 8000U account has evaporated! Opened a 3x long position, and it only dropped a few points and wiped out completely!”

This situation is not uncommon — many new traders believe that “using all the capital will yield more profit.” In reality, this is one of the most common and dangerous mistakes.

Using the entire account to place an order is no different from a door without a safety lock: just a slight market reversal will cause the account to burn through much faster than if you used a smaller position.

The reason many people get 'burned' is not because of high leverage, but because of excessively large position sizes.

⚖️ Compare the risks between two entry methods

Assuming an account has 1000U:

  • If using 900U to open a position with 3x leverage, a price drop of only 5.6% will liquidate the account.

  • But if only using 90U (that is 9% of total capital) with the same 3x leverage, then you must reduce to 88.9% to lose all capital.
    → The risk tolerance level is 15 times higher.15 times.

This shows that the issue is not using leverage, but using leverage with all assets.

📘 Follow the principle of 'not burning the account' in leveraged trading

1. Limit the capital for each trade to 8% of the total account

For example, with an account of 8000U, you should only use a maximum of 640U for a trade.

Even if cut off at 8%, the loss is only 51.2U, which is 0.64% of total capital – hardly has a significant impact on the account.

2. Do not let each loss exceed 1.2% of total capital

If using 640U with 3x leverage, set a stop loss at 1% beforehand, equivalent to 38.4U, which is 1.2% of total capital.

This rule helps protect the account from being 'trapped' or suffering uncontrolled deep losses.

3. Avoid trading when the market is unclear

When the trend is unclear, staying out of the market is also a position.
Absolutely do not 'hold positions' or 'increase positions when in profit', as this is the fastest way to turn small profits into large losses.

💡 Conclusion

Leverage is not the enemy — the wrong use of leverage is the reason many people lose everything.

Trading is a game of risk management and discipline, not a game of chance.

As long as you follow the three principles above, investors can not only preserve their capital but also sustainably grow their account over time.