Within the circle, we often see two extremes: one person uses 100 times leverage to go all-in, believing 'winning will bring in young models'; another person is terrified of leverage and only dares to play spot trading. In fact, both are right and both are wrong. The mistake lies in treating the leverage tool itself as the reason for profit and loss.
In the 'Whale Club,' we clearly distinguish: leverage is a tool, and risk comes from position management. Today, I will lay it all out and tell you how we internally manage to play with high leverage while controlling risk.
Core differences: your leverage is placed on 'risk'; my leverage is placed on 'profit and loss ratio.'
For example:
You: Feeling it will rise, 100,000 U principal, opening a long position with 100 times leverage. Stop loss? We'll see. This is called 'leverage with unknown risk', and liquidation is the destination.
Me: Signal appears, 10,000 U principal, using the 'counter-trend attack' framework. I set a fixed stop loss of 0.3% (maximum loss of 30 U per trade), but to amplify potential profits, I use 10 times full leverage.
Calculating:
My single market value: 10,000 U * 10 times = 100,000 U contract.
But my single stop loss amount is: 10,000 U (principal) * 0.3% = 30 U.
Converted to contract price fluctuation: 30 U / 100,000 U = 0.03%. This means that even with a 10x leverage, the allowable price reversal fluctuation is actually very small (0.3%/10=0.03%).
Did you discover the secret? I offset the risk amplification effect brought by high leverage with extremely strict stop losses (0.3%), keeping the absolute loss amount per trade (30 U) still very small. But at the same time, once the direction is correct, 10x leverage amplifies the profit by 10 times! This is the correct use of 'high win-loss ratio strategy' combined with high leverage.
On the contrary, for the 'high win rate strategy' (like trend-following), we instead use low leverage:
Because the stop loss range for trend-following is relatively large (like 1.5%-3%), if we use high leverage again, the single loss will dramatically increase.
Therefore, for trend-following, we recommend using leverage of only 1.5-3 times, prioritizing high win rates rather than single-instance high profits.
Therefore, the whale's leverage formula is:
Allowable leverage multiple ≈ Your preset maximum loss percentage per trade / Your set stop loss percentage per trade
For example, if you only want to lose a maximum of 2% of your total funds per trade, and your strategy sets the stop loss at 0.5%, then theoretically the leverage you can use = 2% / 0.5% = 4 times.
Clear suggestions for different players:
Novice/Conservative: Start with 'trend-following', using 1.5-2 times leverage, practicing discipline, and feeling the warmth of a high win rate system.
Intermediate/Aggressive: Try 'counter-trend attack', but start with a fixed stop loss of 0.5%-0.7% and 3-5 times leverage. After stabilizing your mindset, pursue the extreme (0.3% stop loss, high leverage).
All players: Must pair with 'Fibonacci DCA' as the financial bottom line, which is the ballast for your account, keeping your mindset stable in the contract battles.
Buddies who understand the above method can check here~
Whale Club: Building a robust cryptocurrency trading system for users with large capital volumes
Final words:
Leverage is not the devil; uncontrolled risk is. When you lock in downward risk with a strict framework, leverage becomes your wings to seize opportunities. From today, forget about 'leverage multiples' and think about 'risk exposure'. When you clearly know that this single trade with 10x leverage will at most take away 2% of your total funds, you can truly master it and let it accelerate your path to compound interest.
(Regarding how to specifically set these stop loss and take profit parameters, as well as how to identify high win rates and high win-loss ratio entry signals, follow me for continuous sharing of real battle maps from the whales.)
