I am sure that most people who have their futures accounts burned are because they did not grasp the important steps below
1. Understand the purpose and identify the risks
Leveraged trading is when you borrow additional capital from the exchange to increase profits, but it also amplifies the risks.
For example:
You have $100 → use leverage x10 → place an order with a volume of $1000
Price increases by 10% → profit $100 (double the initial capital)
Price drops 10% → loses $100
Newcomers often only look at profits.
The first thing to determine is: how much % of capital are you willing to lose? To earn how much?
Using leverage is good if you manage risk properly to optimize capital.
For example:
You have 10k, maximum risk 5%. Enter ETH with 2% risk, volume 10k.
See a good BNB opportunity, risk still 3% but capital is insufficient.
Solution: split ETH capital remaining 5k + leverage x2 to meet volume → still have capital to enter BNB.
Process: determine risk → calculate volume → then decide whether to use leverage or not.
2. Understand the types of leverage and fees
Currently, there are 2 main forms on crypto exchanges
- Margin trading:
+ Margin to borrow money to buy real assets
+ Spot market
+ Fees: transaction fees, interest fees, liquidation fees
+ Leverage: max x10
- Futures trading:
+ margin to trade futures contracts, not actually buying assets
+ Derivatives market
+ Fees: transaction fees, funding rate, liquidation fees
+ Leverage: Up to 100x (depending on the exchange), but will be higher than margin
Each type has different transaction fees and optimizes according to each trading style.
You need to research the exchange fee structure before trading, as fees directly affect long-term profits.
For example, Binance: https://binance.com/en/fee/trading
3. Understand technical analysis methods
Leveraged trading whether future or margin is a short-term game - different from long-term holding investment
To survive and adapt to the market in the short term, you must equip yourself with a clear method, primarily based on technical analysis.
Why? Technical analysis is based on price action, analyzing supply and demand fluctuations of assets.
And can be performed on multiple time frames ---> trading signals with clear entry, SL and TP points.
Long-term holding may only require fundamental analysis.
But once you've touched leverage → you must be able to read price action and supply-demand fluctuations.
4. Always determine risk and set stop-loss (SL)
Leverage = much higher risk of account burn.
For example, the crash on 10/10 was an unexpected event that no one could foresee when the market crashed 85% in one night.
Imagine you all in on an asset and use leverage x2 to hold a long-term asset because you think (x2 won't burn anything).
After one night, everything disappeared, leaving nothing behind - this is a scenario that many of our community have experienced after that crash.
If you determine to hold long without SL, accumulating assets, don't think about using leverage on the exchange.
And once you've trapped yourself, you must determine risk and set SL.
The market can do anything - that is a truth you need to accept.
5. Backtest before trading real money
Practice on demo and record results before depositing real money.
This is a step that many people skip, and it's also the reason 90% of newcomers burn money early.
Before 'putting real money' to trade leverage in the short term, you should:
- Trade demo or live with the smallest capital to backtest the trading method.
- Record at least 50–100 trades according to the system.
- Check metrics such as:
+ Winrate
+ Average R:R (at least 1:1.5 or higher)
+ Does each trade comply with SL/TP correctly?
+ Expected profit per month/year
When you have a method + discipline proven by data, then you can gradually increase capital and risk to make money.