I constantly observe how traders with high leverage (lev) lose their positions — often not because of major market crashes, but due to normal price fluctuations. That’s the insidious part: with 50x leverage, a 2% move is enough to wipe out the entire margin. Even worse is 10x leverage, where a 10% price movement can already trigger liquidation.

The problem is that many traders underestimate these scenarios. They focus on the profit potential but overlook the financing fees that continuously eat away at their margin. Additionally, unexpectedly strong price movements, which are completely normal in the crypto market, can occur. What happens then can be quite dramatic: one liquidation triggers the next because forced sales push prices down further — a chain reaction that amplifies itself.

Anyone trading with leverage (lev) should be honest with themselves. Setting stop-loss orders in advance is not optional but essential. The position size should be based on realistic risk levels, not on maximum leverage. Regularly monitoring margin health is key to avoiding surprising liquidations. Ultimately: leverage amplifies both gains and losses. Those who do not respect this pay the price.