1. What is Leverage?
Leverage lets you control a larger position with less capital. With 10x leverage, $100 controls a $1,000 position. Profits are amplified 10x—but so are losses.
2. Liquidation Prices
📊 BTC LONG at $87,000 (Isolated Margin)
3x: Liquidated at ~$58,000 (33% drop) — Safe
5x: ~$69,600 (20% drop) — Moderate
10x: ~$78,300 (10% drop) — Risky
20x: ~$82,650 (5% drop) — Very risky
50x: ~$85,260 (2% drop) — Gambling
3. Recommended Leverage by Experience
- Beginner: 2-3x maximum
- Intermediate: 5-7x with proper stop loss
- Advanced/AI: 7-12x with systematic risk management
4. Kelly Criterion for Optimal Sizing
Optimal fraction = Win% - (Loss% / Reward-Risk Ratio)
Example: 45% win, 2.5:1 ratio
Kelly = 0.45 - (0.55/2.5) = 23%
Quarter Kelly (practical) = 5.75%
5. Position Sizing Rules
- Risk max 1-3% of total capital per trade
- Max 3-5 concurrent positions
- Total exposure under 10% of portfolio
6. Common Mistakes
- ❌ Using 20x+ leverage — this is gambling
- ❌ No stop loss — guaranteed account blow-up
- ❌ Increasing leverage after losses
- ❌ Cross margin with high leverage