I see many bloggers saying they used 5x or 10x leverage, and that’s already quite small.
I am really speechless. In fact, I have to tell you all, you are all wrong.
Leverage is not calculated this way at all. The leverage rate calculated by the platform has little to do with you; it’s almost a share ratio that affects the platform's safety. You should calculate risk based on stop-loss or full principal.
With crypto's volatility being so high, opening positions evenly in batches, around 10-20% of the principal each time is sufficient. The total position limit should be about 2x (short) to 4x (long) of the principal. At the same time, the overall stop-loss risk should be kept within 20% of the principal (or your actual psychological tolerance must also be less than 20%). It is recommended to average the risk over time to 10%, meaning there are periods of being in cash... Some may ask, then why do contracts at all... Hehe... I might offend the entire crypto community by saying this, but do you really want to earn coins or make money? Is there a more flexible speculative tool than contracts? Is USDT really useless? When a bear market arrives, is it safer to hold coins or USDT? When you spend money, are you spending coins or USDT?
Dear friends in the crypto community, doing contracts (pure speculation) is completely different from investing in coins (similar to venture capital); they are two entirely different professions.
The essence of contracts is trading risk. Or rather, making money by managing risk and expectations.
When doing contracts, you must clarify this statement.
You can choose not to believe in technology, not to believe in market makers, not to believe in K-line moving averages, not to believe in BTC, thinking they are all scammers. Conversely, you can also choose to trust them; these conceptual issues won’t hinder you from making money.
But there is one thing you must understand, and that is [risk]: what is risk, how to manage risk, how to calculate risk, how to operate risk, how to withdraw from risk... how to survive...
------- You cannot earn money outside your cognitive range... Originally, if you invest in a coin and its value doubles, you earn 100%; then if you do contracts with a 3x leverage, resulting in a 300% profit, who earns that extra part of the money, where does it come from, do you know?
—— For contract trading, what you actually earn is the money from risk management, which is the money given to you by others' losses and liquidations; to get this money, first, you cannot be liquidated...
In fact, viewing the market from the perspective of [risk] is completely different from how ordinary people see it. It's like looking at a mountain from the bottom compared to having a view from the top; it’s a whole different matter. For instance, those who buy coins may hold their positions and wait for a rise, enduring losses with patience... But with contracts, if you hold a position and wait, enduring losses, most likely you won't survive the first three episodes.
