At 2x or at 50x, this trade loses the same 100 USDT at the stop.
Leverage was never in that number. Position size × stop distance is.
10,000 USDT account, 1% risk = 100 USDT.
Stop 2% below entry.
100 ÷ 0.02 = 5,000 USDT position.
Same 5,000 USDT position, only leverage changes
(distance to liquidation, 0.5% maintenance margin, fees excluded):
2x → 2,500 margin → about -49.5%
5x → 1,000 margin → about -19.5%
10x → 500 margin → about -9.5%
25x → 200 margin → about -3.5%
50x → 100 margin → about -1.5%
At 50x, liquidation sits at -1.5%. Your stop at -2% never gets the chance to fire.
At 25x, only 1.5 points separate them. A late fill in a fast drop can close that gap.
Quick check: leverage × stop distance. The closer it gets to 100%, the more likely liquidation comes first.
Low leverage doesn't mean posting your whole account. At 5x, 1,000 USDT goes in and 9,000 USDT stays free for the next trade.
So the order is: loss limit, stop, size, then the lowest leverage that keeps liquidation well past your stop.
Do you pick leverage first, or size first?
$BTC #Futures #RiskManagement
Leverage was never in that number. Position size × stop distance is.
10,000 USDT account, 1% risk = 100 USDT.
Stop 2% below entry.
100 ÷ 0.02 = 5,000 USDT position.
Same 5,000 USDT position, only leverage changes
(distance to liquidation, 0.5% maintenance margin, fees excluded):
2x → 2,500 margin → about -49.5%
5x → 1,000 margin → about -19.5%
10x → 500 margin → about -9.5%
25x → 200 margin → about -3.5%
50x → 100 margin → about -1.5%
At 50x, liquidation sits at -1.5%. Your stop at -2% never gets the chance to fire.
At 25x, only 1.5 points separate them. A late fill in a fast drop can close that gap.
Quick check: leverage × stop distance. The closer it gets to 100%, the more likely liquidation comes first.
Low leverage doesn't mean posting your whole account. At 5x, 1,000 USDT goes in and 9,000 USDT stays free for the next trade.
So the order is: loss limit, stop, size, then the lowest leverage that keeps liquidation well past your stop.
Do you pick leverage first, or size first?
$BTC #Futures #RiskManagement