Eight years of experience in the cryptocurrency market summarized in one sentence: There is no 'standard answer' for leverage.

The core depends on your risk tolerance, capital amount, and trading cycle, but remember three iron rules:

1. Three core logics for choosing leverage

1. Capital efficiency:

1-10x leverage: Extremely low capital utilization, better to buy spot directly (one Bitcoin contract requires hundreds of U as principal, and fees eat into profits)

20-50x leverage: Balances risk and reward, suitable for most people (can withstand fluctuations of 3%-5%, avoid being liquidated by small fluctuations)

100x leverage: For experts only, only suitable for capturing short-term severe fluctuations (like spike events), requires second-level monitoring + strict stop-loss

2. Liquidation red line:

Use the formula to calculate the liquidation point: Liquidation price = Opening price × (1 ± Margin rate/Leverage), ensure that reverse fluctuations do not exceed 1%-2% to avoid liquidation (newbies should leave a 3x safety cushion, for example, if holding 10U, the account should leave at least 30U)

3. Trading cycle:

Ultra short-term (minute level): 50-100x, take profit at 1%

Swing (daily level): 20-30x, can withstand a 3% pullback

Start with 10-20x, first practice position management (single margin should not exceed 5% of total capital)

2. Three lifesaving principles that are more important than leverage

1. Always use isolated margin mode: Lock the single risk within the position (for example, with 5000U capital, only use 100U margin for a single position, the maximum loss in liquidation is 100U, leaving 4900U to continue)

2. Set your stop-loss and don’t watch the market: Short-term stop-loss set at 0.5%-1%, swing set at 3%-5%, cut losses when triggered, do not hold positions (data: holding positions for over 1 hour, liquidation rate exceeds 50%)

3. Stop when you’ve made enough for the day: With 5000U capital, daily target is 1%-2% (50-100U), cryptocurrency daily fluctuations exceed 3%+, capturing 1% fluctuations with 100x leverage can meet the target, do not be greedy (greed is the biggest culprit of liquidation)

3. Two misconceptions beginners must avoid

Misconception 1: 'The higher the leverage, the more you earn'

Truth: Under 100x leverage, if Bitcoin drops by 1%, you lose all your margin, while 30x leverage can withstand a 3.3% drop, the latter has a survival probability 3 times higher

Misconception 2: 'The less margin, the better'

Truth: Margin = safety cushion, opening 100x with 5U seems to save capital, but with slight market turbulence, it can lead to liquidation. Leave 15U margin (3x safety cushion), can withstand a 3% reverse fluctuation until the reversal opportunity comes

There is no 'reasonable multiple', only 'act according to your ability'

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