People have personalities and those personalities decides on all this, it doesn't really matter what you do. I think it's clear that we are going to see people do whatever they want to do and they will not be hearing it from anyone to do otherwise.
If you are the type of person who does spot trading then you will keep being a spot trader, if you are the type of person who does 100x leverage then whatever I tell you, or whoever tells you not to, you are going to not stop, maybe take it down another, like 50x or something or 20x but not going to be a spot trader or do 2x at all, that won't work. That is why it is quite important to make it work one way or another, it is not really something that I would suggest doing otherwise and don't expect any different.
Topic: Do not use more than 2x leverage - page 2. (Read 562 times)
Trading with leverage will certainly increase your potential profits, but it should be perform wisely, otherwise you will lose all your funds in just a blink of an eye. Probably that’s why Vitalik made it as a financial advise because majority of the traders or investors still lose in the process, most particularly for those who take leverage.
However, if you are still beginning to learn the process, it would be much better to stay away using leverage, you can safely trade or invest without compromising its own risk.
Without doing it, we still can increase our potential profits. What's better is, we can do it in a less risky way. It is by increasing our knowledge on doing normal trades. If we want to, we can also use more money although this might start to increase our risks, but this is still better than doing leverage trades. No matter how wise we are, there is that one moment where we can lose.However, if you are still beginning to learn the process, it would be much better to stay away using leverage, you can safely trade or invest without compromising its own risk.
So, guts is also needed here and it's better to use only amounts that we can afford to lose. Like I said earlier, there is still a risk in a normal trade, so how much more if the ones who are doing it are the newbies? They still lack in knowledge, so I won't say they can do it safely.
You can't generalize that. Leverages originally come from the trading of currency pairs (USD <-> EUR, ...). These hardly change during the day and were therefore absolutely uninteresting to trade for traditional small investors. Only with leverage was it possible for small investors to make - or lose - large profits with small stakes.
The trend towards leverage then gradually spread to other asset classes.
But I agree with you: leverage has no place in a highly volatile market like cryptos. You can get enough "action" in the market without x100. In my opinion, by the way, leverage has no place in the traditional equity market either.
The trend towards leverage then gradually spread to other asset classes.
But I agree with you: leverage has no place in a highly volatile market like cryptos. You can get enough "action" in the market without x100. In my opinion, by the way, leverage has no place in the traditional equity market either.
Leverage is one of the most misunderstood concepts within trading.
Leverage is not important, risk management is important.
It makes no sense to talk about leverage in a context where trade-risk in relation to your account size and position-size is not mentioned.
Once you have calculated those two parameters, then can you evaluate if your leverage is too high.
Leverage is just a tool, nothing more.
Leverage is the most important part of future tradiing because this portion is only use to need while you have money needed in the type of loan.Leverage is not important, risk management is important.
It makes no sense to talk about leverage in a context where trade-risk in relation to your account size and position-size is not mentioned.
Once you have calculated those two parameters, then can you evaluate if your leverage is too high.
Leverage is just a tool, nothing more.
Whenever you take a trading in future the less leverage will have less risk and more leverage have more risk so it's the leverage have important role in future trading.
You are leveraging your money while also leveraging your risk as well. I would say it is a good move when you are on the right direction, but it is literally losing all of your money when you are on the wrong direction and you shouldn't take it.
Leverage is one of the most misunderstood concepts within trading.
Leverage is not important, risk management is important.
It makes no sense to talk about leverage in a context where trade-risk in relation to your account size and position-size is not mentioned.
Once you have calculated those two parameters, then can you evaluate if your leverage is too high.
Leverage is just a tool, nothing more.
Leverage is not important, risk management is important.
It makes no sense to talk about leverage in a context where trade-risk in relation to your account size and position-size is not mentioned.
Once you have calculated those two parameters, then can you evaluate if your leverage is too high.
Leverage is just a tool, nothing more.
Leverage is the most important part of future tradiing because this portion is only use to need while you have money needed in the type of loan.
Whenever you take a trading in future the less leverage will have less risk and more leverage have more risk so it's the leverage have important role in future trading.
Don't use >2x leverage. Just don't.
It is one of the things he listed as a financial advice. As a trader, what do you think about it?
I think it's a wrong advice, coming from him. It casts a shadow of fear on traders who trade using leverage. 2x isn't that high if one knew what one's doing, trading. It's very infinitesimal. Instead of trading on <2x while not completely go off it and do Spot trading. People don't become rich or make a sustainable earning from trading using that. Fear kills the morale of traders the same way greed does. Every traders should know how to kill both. For me, 5X till 10X is ok. Otherwise, the trader should stick to Spot trading. It is one of the things he listed as a financial advice. As a trader, what do you think about it?
there's reason why these high leverages exist in the first place though its to give bigger opportunity for those that are brave enough to bet on their decision and I think thats fair, if anyone is losing big with future thats because they are reckless not knowing how to trade, these leverage are good and I personally have made quite good amount of money from these leverages.
its just that some random newbie trying to make it big using leverage that is over their capability and then go around venting is just really try to give bad reputation for this high leverage mechanism but overall i think there are many people that take advantage of this feature still.
imagine with $1 you can just 100x leverage since you are so sure that the coin is gonna be rising anyway and then you are investing as if you invested $100 but with only $1 i think thats fair enough.
but of course the risk is also higher but overall its fair game to be honest.
Placing $1 just as an experiment to see how effective using x100 leverage is, this will be a great thing when the trade is successful.its just that some random newbie trying to make it big using leverage that is over their capability and then go around venting is just really try to give bad reputation for this high leverage mechanism but overall i think there are many people that take advantage of this feature still.
imagine with $1 you can just 100x leverage since you are so sure that the coin is gonna be rising anyway and then you are investing as if you invested $100 but with only $1 i think thats fair enough.
but of course the risk is also higher but overall its fair game to be honest.
There will be no psychological disturbance when only using $1, but beginners will have different thoughts, there will be a lot of bets used because they cannot manage and whether using large orders will be risky or not. whereas if the trade failed by x100, it would wipe out all their assets. So the use of leverage must be wise enough and must not be greedy or in accordance with the trader's abilities and knowledge.
But the most important thing to remember is that if you will do an experiment like this, increasing the leverage and opening a trade, then make sure that the funds you have in the trading account are meant for that experimentation or that the funds will not affect your financial state even if they are gone. honestly, I sometimes do this kind of trading, increasing the leverage too much and just seeing what will happen, but no matter what the result, lose or win trade, it will not affect my other funds as I have a separate account for live trading. You should always take precautions to secure your funds.
there's reason why these high leverages exist in the first place though its to give bigger opportunity for those that are brave enough to bet on their decision and I think thats fair, if anyone is losing big with future thats because they are reckless not knowing how to trade, these leverage are good and I personally have made quite good amount of money from these leverages.
its just that some random newbie trying to make it big using leverage that is over their capability and then go around venting is just really try to give bad reputation for this high leverage mechanism but overall i think there are many people that take advantage of this feature still.
imagine with $1 you can just 100x leverage since you are so sure that the coin is gonna be rising anyway and then you are investing as if you invested $100 but with only $1 i think thats fair enough.
but of course the risk is also higher but overall its fair game to be honest.
Placing $1 just as an experiment to see how effective using x100 leverage is, this will be a great thing when the trade is successful.its just that some random newbie trying to make it big using leverage that is over their capability and then go around venting is just really try to give bad reputation for this high leverage mechanism but overall i think there are many people that take advantage of this feature still.
imagine with $1 you can just 100x leverage since you are so sure that the coin is gonna be rising anyway and then you are investing as if you invested $100 but with only $1 i think thats fair enough.
but of course the risk is also higher but overall its fair game to be honest.
There will be no psychological disturbance when only using $1, but beginners will have different thoughts, there will be a lot of bets used because they cannot manage and whether using large orders will be risky or not. whereas if the trade failed by x100, it would wipe out all their assets. So the use of leverage must be wise enough and must not be greedy or in accordance with the trader's abilities and knowledge.
Agreed Over leveraging is one of the quickest way one can lose his trading account ,It's much better to aims for gradual growth instead of blowing up the whole trading account . Its a very dangerous habit when it comes to trading .
It occurred to me that 2x leverage would be used by people who have a lot of money, and people who don't have money, even if they have a little money. The extra that is saved for trading is what leverage they are going to increase so that they can make more loss in a few seconds, so I think it's a risky thing, the more leverage you use.
It can give you both in loss and profit if you have more amount then leverage if you use less then you can effort if you have less money and you are using more than 2x leverage you may have a problem
It can give you both in loss and profit if you have more amount then leverage if you use less then you can effort if you have less money and you are using more than 2x leverage you may have a problem
maybe what is meant for long term trading, most average futures traders place leverage at 25+, because it usually only works temporarily, like me personally sometimes I increase the leverage to 125 x and only order $1-2 in each trade setting the SL and TP options for Minimizing risk, which Vitalik said is true if we trade for the long term, does not apply to the short term
When one trades with high leverage the chances of liquidation are high because when you go to trade with a $100 budget and use 10x leverage it will trade an amount equal to $1000 and if the price of your chosen coin is up 10% or Down and if it is against your entry you will lose your $100 and the trade will be cancelled. There if you take 2x leverage then the price of that coin has to change by 50% for you to liquidate. High leverage means more profit and more loss. So it is better to use less leverage to be less risk
You misunderstand the rules of trading with leverage. If you have a budget of $100, you do not need to open an order using your entire budget, otherwise what you have described will happen. With a budget of $ 100, you will need to open a position with a leverage of x10 for a maximum of $50, so that in case of loss of these funds, your balance will decrease by only 5%.
I guess there is one point of Vitalik's life that he did more than 2x leverage and he lost and he's done with it. It's a good advise for someone who's conservative in investing but in trading, traders should also consider what he's said.
If someone is going to follow his advise, that's good and it helped what he said. But if not, no matter who's saying these advises, we're on our own as we trade.
Good thing with Vitalik is that, he's got his own platform through his social media and I am sure that many newbies that admires him follows him a lot.
Trading with leverage will certainly increase your potential profits, but it should be perform wisely, otherwise you will lose all your funds in just a blink of an eye. Probably that’s why Vitalik made it as a financial advise because majority of the traders or investors still lose in the process, most particularly for those who take leverage.If someone is going to follow his advise, that's good and it helped what he said. But if not, no matter who's saying these advises, we're on our own as we trade.
Good thing with Vitalik is that, he's got his own platform through his social media and I am sure that many newbies that admires him follows him a lot.
However, if you are still beginning to learn the process, it would be much better to stay away using leverage, you can safely trade or invest without compromising its own risk.
Yes, you are absolutely right, because the more leverage you give, the more chances of getting credit in your loan, the less leverage you have, the safe your money will be. The money will Safe from being liquidate,
So I will also prefer that the person who has most of the leverage should keep it low, then whatever we have, we will continue our trading with safety and our profit will be confirm instead of loss from liquidation
There is nothing wrong with leveraging but sometimes some persons do misuse the ability for them to leverage.So I will also prefer that the person who has most of the leverage should keep it low, then whatever we have, we will continue our trading with safety and our profit will be confirm instead of loss from liquidation
Leverage is a way for us to increase the amount of funds we are using to enter the market. Once we understand the brain behind leveraging, we are not going to have problem on the right way to leverage. Many have leverage ld and have made money from the market while others had ended up in loses.
We can increase when we have sufficient amount available. If the budget we have is low, How can we protect ourselves from liquidation?
That trading should be done by those who have a sufficient amount of budget they can reduce or increase the leverage and can bear this loss from time to time to invest in it in order to save themselves from being liquidated and to save their entire budget from being liquiditation.
Yes, you are absolutely right, because the more leverage you give, the more chances of getting credit in your loan, the less leverage you have, the safe your money will be. The money will Safe from being liquidate,
So I will also prefer that the person who has most of the leverage should keep it low, then whatever we have, we will continue our trading with safety and our profit will be confirm instead of loss from liquidation
There is nothing wrong with leveraging but sometimes some persons do misuse the ability for them to leverage.So I will also prefer that the person who has most of the leverage should keep it low, then whatever we have, we will continue our trading with safety and our profit will be confirm instead of loss from liquidation
Leverage is a way for us to increase the amount of funds we are using to enter the market. Once we understand the brain behind leveraging, we are not going to have problem on the right way to leverage. Many have leverage ld and have made money from the market while others had ended up in loses.
We can increase when we have sufficient amount available. If the budget we have is low, How can we protect ourselves from liquidation?
That trading should be done by those who have a sufficient amount of budget they can reduce or increase the leverage and can bear this loss from time to time to invest in it in order to save themselves from being liquidated and to save their entire budget from being liquiditation.
This is what I keep telling anyone who trades in futures. You really have to use leverage wisely and don't use high leverage. The aim is to get bigger profits, but the risk of loss is also bigger. In my opinion, using 2x leverage is enough. Sometimes those who are new to futures use higher leverage and end up being liquidated. Apart from that, management needs to be done correctly, without management trading will not go according to plan.
there's reason why these high leverages exist in the first place though its to give bigger opportunity for those that are brave enough to bet on their decision and I think thats fair, if anyone is losing big with future thats because they are reckless not knowing how to trade, these leverage are good and I personally have made quite good amount of money from these leverages.its just that some random newbie trying to make it big using leverage that is over their capability and then go around venting is just really try to give bad reputation for this high leverage mechanism but overall i think there are many people that take advantage of this feature still.
imagine with $1 you can just 100x leverage since you are so sure that the coin is gonna be rising anyway and then you are investing as if you invested $100 but with only $1 i think thats fair enough.
but of course the risk is also higher but overall its fair game to be honest.
I am referring to Vitalik Buterin, one of the ethereum founders post on Twitter that states that people should not use more than 2x leverage.
Don't use >2x leverage. Just don't.
It is one of the things he listed as a financial advice. As a trader, what do you think about it? We set some money aside for trading and as for me I still use up to 2.5x leverage for bitcoin to open a long position.
I think using this low leverage is good for traders. But investors should not use leverage at all. Investors should even supposed not to leave coins on exchanges but moved the coins to a noncustodial wallet.
This is also not applicable to many coins that are very volatile in a way that 1x leverage can even lead to liquidation of asset. See what happened to TRB recently that fall from almost $700 to $125.
Don't use >2x leverage. Just don't.
It is one of the things he listed as a financial advice. As a trader, what do you think about it? We set some money aside for trading and as for me I still use up to 2.5x leverage for bitcoin to open a long position.
I think using this low leverage is good for traders. But investors should not use leverage at all. Investors should even supposed not to leave coins on exchanges but moved the coins to a noncustodial wallet.
This is also not applicable to many coins that are very volatile in a way that 1x leverage can even lead to liquidation of asset. See what happened to TRB recently that fall from almost $700 to $125.
It depends on how much money you have in your account.
When there is 50k you can even do a 1k trade with 50x leverage. It is al about the margin and not the leverage!
It's risky for all volatile assets actually, not for cryptos only, penny stocks could also be dangerous. But it is what it is, it's not more risky than a bet at a casino or a bookie. With a good money management you shouldn't lose much funds. So saying it's very dangerous and you should never use it is a bit overkill IMO, if you're not a beginner you will take care to not engage too much funds in such trades in order to preserve your bankroll.
Once you have calculated those two parameters, then can you evaluate if your leverage is too high.
I'm not sure how to calculate to know if your leverage is high, too high, too low, or just right enough. I guess this is pretty subjective for one to know. Its not subjective at all.
Your leverage is too high if you do not have enough margin to cover your risk, plus a head room to account for the liquidation mechanism, which trigger before your margin is at zero.
That,s it. There is no such thing as too low leverage or "just right".
Leverage is one of the most misunderstood concepts in trading. I could explain in more details about how you do prober risk management, I just feel no one here would really care, it is obvious that this thread is more about making post in signature campaigns that actually having a discussion about trading.
This is what I keep telling anyone who trades in futures. You really have to use leverage wisely and don't use high leverage. The aim is to get bigger profits, but the risk of loss is also bigger. In my opinion, using 2x leverage is enough. Sometimes those who are new to futures use higher leverage and end up being liquidated. Apart from that, management needs to be done correctly, without management trading will not go according to plan.
Jump to: