$BTC First calculate “the maximum you can lose,” then choose leverage—don’t do it the other way around.
Small example: Account balance 1,000 USDT. Per trade, you can bear at most 1%, i.e., 10 USDT. If the trade becomes invalid when the price is 2% away from the entry price, then the position’s notional value = 10 ÷ 2% = 500 USDT. With the same 500 USDT notional position, using 5x leverage means the initial margin is about 100 USDT, while using 10x leverage means it’s about 50 USDT. If the stop-loss is executed at 2%, the planned loss is still about 10 USDT—it won’t automatically double to 20 just because leverage doubles.
Changing leverage affects margin usage and liquidation distance. After increasing leverage, you also need to enlarge the position’s notional value for profits and losses to scale accordingly. In practice, you must also leave room for trading fees and slippage; therefore, of the 10 USDT risk budget, you might only allocate 8–9 USDT to price movement.
Order of operations: determine the invalidation point → determine how much you can lose → work backward to the position size → finally choose the leverage. Don’t use the liquidation price as a substitute for your stop-loss.
$BTC
Will your per-trade risk limit be set at 1%, or even lower?
#BTC #仓位管理 #Contract tutorial
Small example: Account balance 1,000 USDT. Per trade, you can bear at most 1%, i.e., 10 USDT. If the trade becomes invalid when the price is 2% away from the entry price, then the position’s notional value = 10 ÷ 2% = 500 USDT. With the same 500 USDT notional position, using 5x leverage means the initial margin is about 100 USDT, while using 10x leverage means it’s about 50 USDT. If the stop-loss is executed at 2%, the planned loss is still about 10 USDT—it won’t automatically double to 20 just because leverage doubles.
Changing leverage affects margin usage and liquidation distance. After increasing leverage, you also need to enlarge the position’s notional value for profits and losses to scale accordingly. In practice, you must also leave room for trading fees and slippage; therefore, of the 10 USDT risk budget, you might only allocate 8–9 USDT to price movement.
Order of operations: determine the invalidation point → determine how much you can lose → work backward to the position size → finally choose the leverage. Don’t use the liquidation price as a substitute for your stop-loss.
$BTC
Will your per-trade risk limit be set at 1%, or even lower?
#BTC #仓位管理 #Contract tutorial