In the crypto trading world, using 1000U with 10x leverage versus 2000U with 5x leverage. What's the difference?
The two position methods differ in leverage and capital efficiency, but the core is risk and return.
Common points:
Actual position size is the same:
1000U * 10x leverage = 10,000U position
2000U * 5x leverage = 10,000U position
Your exposure to the market is the same; a 1% market fluctuation will result in a profit or loss of 100U.
Differences:
Liquidation risk is different:
1000U with 10x leverage: liquidation price is closer, because of the high leverage, a slight price fluctuation in the opposite direction will quickly exhaust your margin (1000U), leading to a higher liquidation risk.
2000U with 5x leverage: liquidation price is further away, requiring a larger market fluctuation in the opposite direction to trigger liquidation, making it relatively safer.
Capital efficiency:
1000U with 10x leverage: saves 1000U, allowing the remaining funds to be used for other trades or as backup capital.
2000U with 5x leverage: lower capital utilization, more money is locked in the position, but the risk is smaller.
Psychological pressure:
High leverage (10x) creates more psychological pressure, as even slight market fluctuations can cause significant unrealized gains or losses in the account. Lower leverage makes it easier to maintain a stable mindset.
Summary:
If you value capital efficiency and are willing to take high risks, you can choose 1000U with 10x leverage;
If you prefer to be more stable and avoid liquidation, you can choose 2000U with 5x leverage.
On the 14th, fans who positioned at 0.37 for WIF, reached a maximum of 0.72, achieving a 92% increase.
Continuously making arrangements every day, currently in profit. For friends who are confused and want to recover losses, just go for it!!
