The Scientific Play of Contract Leverage: The Survival Rule of Treading on a Knife Edge

Last night, I received a soul-searching question from a buddy: Is 50x leverage reasonable? Today, I will discuss the truths that insiders are reluctant to speak about.

The most enchanting quality of perpetual contracts is that as long as you don’t get liquidated, you can theoretically hold your position indefinitely with that infinite check. But this is precisely the biggest gentle trap.

The choice of leverage is essentially the art of risk pricing. I’ve seen too many people fall into the moderation trap: feeling safe with 10x leverage, only to surrender after three fluctuations. Here’s a counterintuitive point: either use 1x leverage for real trading, or jump straight to 100x. The middle ground is the most dangerous comfort zone.

The core logic lies in capital efficiency. With 100x leverage, $4 can control a $400 position, which means that for the same fluctuation amplitude, the return is exponentially different. But 99% of retail traders fall into the trap of only considering profits without calculating the liquidation probability. True professional players follow the 3-3-3 rule:

Margin must cover three extreme fluctuations.

The stop-loss line should be 20% lower than the exchange's liquidation line.

Withdraw the principal immediately when profits exceed 5%, and continue to gamble with the profits.

Specifically, for a $5,000 capital operational plan:

Strictly use isolated risk with a per position model.

Control the stop-loss for each trade within $100 (2% of capital).

Close 50% of the position immediately upon reaching 3% profit, and let the remaining position run with a trailing stop.

Remember, high leverage is not a monstrous flood; it’s uncontrolled desire that is.

Those influencers flaunting 100x returns will never show you their liquidation records. In this zero-sum game, those who survive treat leverage as a precision instrument, not as casino chips.