[TP Academy⑮] The temptation of 100x leverage… your assets go to zero in an instant

For investors wavering amidst the noise of the cryptocurrency market, ‘TokenPost Academy’ with 8 years of practical experience will provide true investment standards. We invite you to embark on a seven-stage masterclass journey that replaces ‘intuition’ with ‘data’ and ‘luck’ with ‘strength’. [Editor’s Note]

“Bitcoin only increased by 1%, but my money doubled!”

The greatest appeal of futures trading lies in the use of leverage to amplify gains. Use your 1 million KRW principal to borrow 9 million KRW from the exchange, purchasing assets worth 10 million KRW (10x). As long as the price rises by 10%, you can achieve a 100% return relative to your principal.

But the opposite is also true. A 10% decline will instantly wipe out your 1 million KRW principal. This is the terrifying ‘liquidation’.

◆ Liquidation Price Calculation: A deadly zone in the blink of an eye

The higher the leverage, the closer the liquidation price is to your entry price.

10x leverage: Price fluctuation of 10% triggers liquidation. (relatively lenient)

50x leverage: Price fluctuation of 2% triggers liquidation. (dangerous)

100x leverage: Price fluctuation of 1% triggers liquidation. (deadly in the blink of an eye)

Bitcoin’s daily 5% rise or fall is common. Using leverage over 20x is essentially declaring, “Today I rely on luck.”

◆ Isolated Margin( vs Cross Margin): How to protect your wallet

Even if liquidation occurs, mechanisms exist to minimize losses.

Cross Margin(: Use all funds in your wallet as collateral. While less likely to be liquidated, once it happens, the entire wallet will be wiped out. (Joint guarantee)

Isolated Margin): Use only the specific funds (margin) you投入 as collateral. Even if liquidation occurs, remaining funds in the wallet are safe. (Firewall)

Beginners must use ‘Isolated Margin’. Even if you make mistakes and fail to stop losses in time, at least you can avoid bankruptcy.

◆ “Leverage is a poisoned Holy Grail”

Professional traders typically use 3~5x leverage, rarely exceeding 10x. High leverage is the realm of quick scalp trading. The greed to “get rich fast” can blind you, leading you to increase leverage. But remember: in gambling, winners are not those with good luck, but those with proper money management.

Set the liquidation price well below support levels, using only the leverage you can afford. This is the way to survive with a ‘wise mind’ rather than a ‘beastly heart’.

👉 [Risk Management] From the liquidation price calculator to the principles of position sizing (adjusting proportions). Master the trading techniques to avoid losses, all in TokenPost Academy’s ‘Stage 6: The Professional’ course.

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