How many times leverage is reasonable to open in the crypto contract market?

Before answering this question, let me briefly explain what a perpetual contract is. A perpetual contract, just as its name suggests, is a contract with no expiration date. In the current digital currency derivatives trading market, perpetual contracts are considered a relatively new type of contract. The meaning of a perpetual contract is that, without liquidation, if you do not actively close the position, you can hold this contract indefinitely. So, how much leverage is reasonable to use when trading? Someone asked me this question yesterday, so I’ll address it today. $BTC

Yesterday, I discussed with a fellow crypto trader who usually uses 50x or 30x leverage. Taking Bitcoin as an example, 30x leverage requires $16U, 50x leverage requires $10U, and 100x leverage requires $5U. Under current market conditions, my personal advice is to only use 100x leverage. Why? Because once you open a leveraged position, whether it’s 1x or 100x, it carries leverage risk. Under current market conditions, the profit from 1x leverage and 100x leverage is worlds apart. Some might say that 1x leverage has less risk, and that’s true. For Bitcoin, if you’re using 1x leverage, currently one contract costs over $470U. Without a significant price increase, you will definitely be at a loss, considering transaction fees. Also, without a big price move, even if you profit, the gains won’t be substantial. What I want to say is that if you choose to trade leveraged contracts, you should maximize the use of that leverage—only open 100x leverage. $ETH

In many cases, traders use insufficient funds to trade contracts that don’t match their current capital, with low margin that can’t support the current market trend. They might see the market fluctuate back and forth, and when a slightly more volatile move occurs, they get liquidated. Later, when the market moves in their favor, it has nothing to do with their previous position. At that point, all their contracts become invalid. Therefore, when trading perpetual contracts, if conditions permit, we should appropriately increase our margin to be prepared—better safe than sorry. No matter what kind of investment, there are risks. Our goal is to minimize those risks and then look at the potential profits. Holding onto a position blindly is a big taboo in contract trading; cutting losses promptly is very necessary. $SOL

Cutting losses in time, combined with isolated margin mode to minimize risk, and not risking your principal, is key. Set a daily target for yourself; once you reach it, close the position promptly. Trading contracts becomes very simple. Experienced traders know that if you have $5,000U as your capital, making $50–$100U profit daily is very achievable. With some strategies, it becomes even easier. Earning $50–$100U a day, what’s that in a month? $BASED

$1,500–$3,000U! Of course, in actual trading, you might encounter big market swings or unexpected events. To be conservative, in 30 days, if you achieve your daily target on 20 days, it’s still profitable. I’ve said so much, I hope it can be helpful to everyone. $DOGE