1. What is leverage?
Leverage lets you control a position several times larger than your margin. At 10x leverage, $100 can control a $1,000 trade. Gains are multiplied by 10, but losses are also multiplied by 10.
2. Liquidation prices by leverage
These examples assume an isolated-margin LONG entry at $87,000:
📊 Approximate LONG liquidation prices
3x: About $58,000, a 33% decline; substantial room.
5x: About $69,600, a 20% decline; moderate room.
10x: About $78,300, a 10% decline; caution required.
20x: About $82,650, a 5% decline; very risky.
50x: About $85,260, a 2% decline; extremely risky.
125x: About $86,304, a 0.8% decline; gambling-like exposure.
3. What leverage level is appropriate?
Beginners: 2–3x
The original guide suggests 2–3x for those starting futures trading, describing the room before liquidation as requiring a Bitcoin decline of more than 30%.
Experienced traders: 5–10x
The guide discusses 5–10x only for traders confident in risk management and able to define clear stops. It calls for isolated margin and a stop-loss.
Professionals or AI: 7–12x
This range is described for use only with a systematic risk-management system. At the time described, NOONOO TRADING applied dynamic leverage according to conditions, averaging 7–9x.
⚠️ Avoid excessive leverage
The guide characterizes leverage above 20x as effectively gambling: a 5% Bitcoin move can liquidate the full position. It also describes professional use above 10x as uncommon.
4. How to set leverage
- Open Binance Futures and select a pair such as BTCUSDT.
- Select the leverage button at the top, such as [20x].
- Use the slider to choose a multiplier from 1x to 125x.
- Select [Confirm].
Change leverage before entering a position. Changing it while a position is open can change the liquidation price, so take care.
5. Calculating leverage with the Kelly criterion
The Kelly criterion is a formula for mathematically optimal bet sizing. The guide uses win probability W and risk-reward ratio R as follows:
6. Why position sizing matters
More important than leverage is the proportion of total assets committed to one position. Low leverage alone does little if all assets are committed to one trade. The guide lists these professional risk-management principles:
- Risk on one position: 1–3% of total assets.
- Maximum simultaneous positions: 3–5.
- Total risk exposure: within 10% of total assets.
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