“In one hour, I lost 500,000, and now I don't even have money for food,” this is what a friend asked me yesterday. The reason is simple: I leveraged 100 times to go long, but the market moved against me by 1%, and I was directly liquidated. In fact, the day before he was liquidated, I reminded the group to be cautious about contracts, just because of a news piece about “the exchange adjusting margin ratios,” unfortunately, he didn't take it seriously.
Today I must talk to everyone about: the 'death trap' of contract leverage, and how to avoid risks in advance from the news. In the cryptocurrency world, contract leverage is like a 'double-edged sword'; if used well, it can amplify profits, but if used poorly, it becomes a 'quick zeroing device'—100 times leverage means that as long as the price moves against you by 1%, you will lose everything. What many people don't know is that adjustments in exchange policies often act as the 'catalyst' for leveraged market movements.
That day I saw an announcement from a major exchange: 'In light of the recent increase in market volatility, we will raise the margin requirements for certain crypto asset contracts.' Many people think this is just a routine operation from the exchange, but they fail to realize the underlying logic: raising the margin requirement means the cost of leverage funds increases. Funds that could have used 100x leverage can now only use 50x, which will force a lot of high-leverage positions to close. More importantly, such policy adjustments are often not isolated. Sure enough, the next day another exchange followed suit and raised the margin requirement, indicating that market risks have reached a level that requires caution.
My tips for avoiding pitfalls:
First, always pay attention to the announcements and news from major exchanges, especially regarding adjustments in margin requirements and delivery rules, as this information directly determines the liquidity of the leverage market.
Second, when you see regulatory agencies making statements about the derivatives market, immediately reduce your leverage ratio or even temporarily withdraw from contract trading. After the Fed's statement last year, many high-leverage investors faced liquidation simply because they didn’t cut losses in time.
Third, cross-verify using 'news + on-chain data.' For example, if you see an exchange raising margin requirements, check the on-chain flow of leverage funds. If you find funds rapidly flowing out, decisively close your positions and exit.
The reason many people fall into the leverage trap is that they are blinded by the fantasy of 'getting rich overnight.' Remember my point: those who can truly make money in the crypto space over the long term almost never engage in high leverage. Especially for beginners, don’t think you can accurately predict the market; even if you are right about the direction, a small fluctuation can force you out early. Those who tell you 'leverage can quickly double your money' are either scammers or inexperienced beginners who haven’t faced liquidation.
If you are still holding high leverage positions, I suggest you reduce your positions immediately. Look at the recent global news: several countries are strengthening regulations on crypto derivatives, and this is no joke. Follow me, and next time I will share with everyone 'how to profit steadily in the crypto space using low-risk strategies.' After all, in the crypto world, staying alive is more important than anything else. Don’t let leverage ruin your chance for a comeback!
If you currently feel helpless and confused about trading and want to learn more about the crypto space and cutting-edge first-hand information, follow me@标哥说币
