Newbie in the crypto world must see: Leverage Usage Guide What is leverage? Simply put, it is a tool for "borrowing power." Imagine this: You take out 100 yuan as margin and choose a 5x leverage, allowing you to operate assets worth 500 yuan. If it increases by 10%, you earn 50 yuan, which is 50% of the principal; but if it decreases by 10%, you will lose all your margin - this is called liquidation. ⚠️ Why must newbies be extremely cautious? 1. Losses accelerate, far exceeding expectations: Even with only minor market fluctuations, high leverage can quickly consume all your principal. This is not an alarmist statement, but a summary of countless real lessons. 2. The "zeroing" risk is real: in a high-leverage environment, a single sharp fluctuation can instantly wipe out an account, leaving no opportunity for recovery. 3. Emotions can easily get out of control: Losses often make people "high", blindly adding leverage in an attempt to recover, which instead leads to deeper troubles. 📌 How to use leverage in a relatively "reasonable" way? (Core Principles) 1. Start with low leverage. Newbies are strongly advised to use 1-5 times leverage, don't think it's low! First, experience the interaction between market fluctuations and leverage. Even with 5 times leverage, a 20% reverse price fluctuation will lead to liquidation, and the risk is already quite high. Even experienced traders are advised to keep leverage within 10 times. Real stable profits rely on strategy and risk control, not high-risk gambling. Leverage over 20 times is no different from gambling; please be cautious! 2. Strictly manage positions It is best not to invest more than 5%-10% of your total funds in each transaction. For example, if you have 10,000 U, it is recommended to use only 100-500 U for a single contract. Absolutely do not go all in! High leverage must be paired with lower positions. For example, when using 10x leverage, it is recommended to reduce the position by half compared to 5x leverage, ensuring that a single loss does not severely impact the overall funds. 3. Firmly execute stop-loss Stop-loss is your most important "lifeline." You must set a stop-loss before opening a position! Based on technical analysis (such as below key support levels) and your own risk tolerance, set an exit point in advance and let the system execute it automatically. Avoid moving stop losses and insist on holding positions. A mentality of luck often leads to irreversible outcomes. 4. Go with the flow and recognize the market Leverage is best used in market environments with clear trends and smooth price movements. Using high leverage in a volatile market can easily lead to consecutive stop losses. Never go against the trend with high leverage! Don't think that "after a big drop, there will definitely be a rebound", the market often has a way of punishing those who are not compliant. 5. Maintain a stable mindset and resist greed. Using leverage is to improve capital efficiency, not to get rich overnight. Set reasonable profit targets, and consider taking partial profits after achieving them, securing gains. Losses are a part of trading, learn to accept them, strictly follow the plan, maintain a calm mindset, and avoid affecting subsequent operations. #BTC##ETH# Follow Wang Mian's discussions on coins, feel free to consult.

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