"Leverage is never the culprit of liquidation; forgetting to do these 3 things is!"
I often get asked: "What leverage is appropriate?" Today, let's not discuss ups and downs, but something practical.
Perpetual contracts, in simple terms, are contracts without an expiration date; as long as you don't get liquidated or close the position, you can theoretically hold on indefinitely. That’s why many people love to use them.
The key question is: how much leverage is considered "reasonable"?
Yesterday I was chatting with a friend, and he said he is used to opening 30x, 50x, or even 100x positions. Many retail traders think this way: with little money, they want to rely on high multiples to bet on big fluctuations. But the real danger is not "how many times the risk is high", but—are you prepared to face the risk? No matter how many times you open!
Take BTC as an example:
The current price is about 116,000U.
Opening 1x requires a margin of 11,600U;
Opening 10x requires a margin of 1,160U;
Opening 100x requires a margin of 116U.
It seems that the higher the leverage, the lower the threshold, which is very tempting. But the core is: as long as you use leverage, you are borrowing money to play; the only difference is the speed of risk exposure.
Don’t just get hung up on the multiple! Think about:
How much can you afford to lose? This money gone, doesn't it affect your life?
Have you set a stop loss? At what point must you cut your position?
Did you use isolated margin? This way, even if you lose, you only lose the money for that trade, without affecting the rest of your account.
Have you controlled your position? Don’t just go all-in!
What are contracts most afraid of? Holding positions! A slight market shake can wipe out a high-leverage account. What's worse is that after liquidation, even if the market improves, it has nothing to do with you. So remember:
Add margin where needed (don’t just hold on).
Stop loss when necessary, take profit when necessary.
Set a small goal every day.
Don't underestimate these "conservative" methods. For example, if you have a capital of 5000U and steadily earn 2% daily (100U), you can accumulate 2000-3000U in a month. This is much more reliable than risking everything and losing it back!
To summarize my advice:
Leverage is not better the higher it is; it depends on your money and plan.
Try to use isolated margin to understand your losses.
Stop loss and take profit must be executed! Making money = good strategy + good mindset.
Don’t be greedy, just have a small goal every day.
Don’t dream of getting rich overnight, and especially don’t continuously get liquidated.
A final reminder: contracts are a double-edged sword. Used well, they can amplify profits; used poorly, they can amplify losses. They are tools, not gambling devices. Controlling your actions is a thousand times more important than choosing the multiple!
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