The backend messages exploded, and eight out of ten were asking: 'How many times of leverage is appropriate for perpetual contracts?' After 7 years of crypto analysis, from bull-bear transitions to market whims, I have seen too many people fall into this issue—newcomers chasing highs and crying while deleting the software after liquidation, and veterans confidently holding positions only to end up with scraps. Today, I won't beat around the bush; I'll directly throw you the 'life-saving essentials'. Understanding this can help you lose five figures less.
First extinguish the fire in your heart: leverage is never a 'get-rich-quick accelerator'; it is a 'double-edged sword'. Used wisely, it can amplify profits, but with a shaky hand, the principal can become the market's 'appetizer'. Especially with perpetual contracts that have no expiration date, it seems like 'if you can hold on, there will be opportunities', but this 'freedom' is precisely the biggest trap—when you make a profit, you want to increase your position and chase more; when you lose, you are reluctant to cut losses and want to hold on for a comeback. Pull the leverage, and greed instantly overshadows risk. By the time you realize it, the account has already turned red to the bottom.
Last week, I chatted with an old player who patted his chest and said, 'I usually operate at 30-50x, very stable.' I asked, 'Why not directly max out at 100x?' He rolled his eyes and said, '100x blows up too quickly, there’s not even a chance to stop loss.' This sounds funny, but it hits the misconception of most people: using leverage is essentially 'dancing on the knife's edge'; 50x is not 'stable', it's 'slowly cutting flesh'; 100x is not 'aggressive', it's 'quickly cutting positions', the difference lies in the few seconds the market gives you to react.
Let me give you a practical calculation: Taking mainstream currencies as an example, a 30x leverage can't withstand a 16-point fluctuation, a 50x can only withstand 10 points, and a 100x is directly reduced to 5 points. 1x leverage is like a 'savings account', earning slowly but keeping the principal safe; 10x leverage is considered 'cautious operation', with controllable fluctuations; but once it exceeds 20x, it's like placing the principal on a 'volcano'—a slight market shake could wipe out your margin.
What truly causes you to be liquidated is not the 'high leverage', but 'greed in increasing positions' and 'not leaving room'. Trying to leverage a few thousand yuan to pry open tens of thousands in returns is like using an egg to hit a rock; a slight market fluctuation can 'sweep you out of the game'. What hurts even more is that sometimes you clearly see the right direction, but due to excessive leverage, a small pullback washes you out, and you can only watch as the market rushes in the expected direction while you become a 'left-out outsider'.
After doing perpetual contracts for 5 years, I've summarized three 'survival rules'. If you can't remember them, take a screenshot to save them:
Only use isolated margin mode: Full margin is like tying your entire fortune to a 'bomb'; a single black swan event can bring you to zero; isolated margin only allocates a portion of funds for operation, so even if you incur losses, there is still room for recovery.
Stop loss ingrained in your bones: Don't harbor the fantasy of 'holding on and it will come back'; the moment you hold a position, the countdown to liquidation has already begun. Before opening a position, set the stop loss point, and once it hits, cut it without hesitation.
Don't be too greedy: If the principal is 5000 yuan, a daily target of earning 50-100 yuan is enough. It seems small, but compounding is much more reliable than 'gambling once'—the market is not short of opportunities, but lacks those who can survive until the opportunities arrive.
Lastly, let me say something heartfelt: The leverage is never magnified by the 'market', but by your 'greed' and 'discipline'. A 10x leverage that can control risk is a thousand times safer than a 5x leverage that is blindly held; retail investors who understand when to take profits and cut losses live longer than 'gamblers' who chase highs and sell lows.
