High leverage is like a mirror; it reflects your profitability brightly while also magnifying every cognitive blind spot.

The other day during the RVV market surge, I saw many people rushing in to buy at the 0.009 price level, only for me to take a short position in the opposite direction. This wasn't a sudden desire to gamble, but because there were clear signals in the market—bullish momentum was already waning, and signs of stagnation were everywhere. In the end, I smoothly closed my short position with a profit. My gains aren't due to luck but come from recognizing market structures and using limited risk to capture high-probability profits.

Having been in this market for so many years, I've seen too many people lose everything because of high leverage. Today, I want to talk about the true nature of leverage—how to make it your weapon instead of a noose.

What exactly is leverage? Simply put, it's borrowing money to trade. If you have $1,000 and use 10x leverage, you can open a position worth $10,000.

Beginners are most easily dazzled by the potential gains of leverage. Imagine: $1,000 principal, 10x leverage, a 5% price increase—you earn 50%! It sounds like a printing press, right?

But that's the trap. The same leverage also proportionally eats into your principal. If the market moves against you by 5%, you lose 50%. If the volatility reaches 10%, the risk of liquidation under high leverage is right in front of you—the exchange will forcibly close your position to protect its loan.

I've seen too many scenarios like this: someone doubles their money quickly with high leverage during a bull market, smiling from ear to ear, only to be completely wiped out after a correction.