Topic: Do not use more than 2x leverage - page 4. (Read 599 times)

No matter what coin you trade, if you do not adhere to the rules of risk management, you will eventually lose your money, even if it is the lowest leverage. Despite the fact that this may be a banal advice that everyone knows about, but nevertheless few people use stop loss in practice, which is mandatory for margin trading.

Vitalik's saying keep it chill with less than 2x leverage is pretty wise. But, you know, it depends on the crypto because some like TRB can go wild even at 1x. Just gotta be smart about balancing risk and keeping your assets safe.

I agree with him and it tallies with my experience, when I open positions, I look at liquidation price I'm going to get, and right balance is usually found between 2-4x leverage. I have positions open with leverage in-between same numbers since long time. I tried going above that once (10x with LINK recently) I sensed liquidation price was too close, but I went ahead with it anyway cause FOMO of bull market it didn't turn out well.


I'm of the opinion that margin trading is not bad, it is a good tool reap huge profits in short amount of time in bullish market, even if you are low on capital.

Just don't use leverage will give you best.

Bitmex Advanced Margin Trading Guide 2020. Margin enthusiasts will feel more scary after reading the guide. I don't share the guide to hook newbies to margin trading because it is always risky to use leverage, even just 2x leverage like Vitalik advised, just don't.

The guide can help newbies to know why their leveraged positions get liquidated by exchanges and know more about the risk, to avoid leverage.

Because they can understand the formula of liquidation, make calculation and think with 2x leverage, price will not crash to liquidation price but if price falls a bit, one round of liquidation will trigger another and more rounds of liquidations, then eventually price will hit to liquidation price of their open position which in their calculation should be safe. In reality it is not safe in market crash.

I have not found information anywhere that Vitalik Buterin is engaged in trading, so I am skeptical of such advice. We know that there are different opinions on this issue, but we can only say for sure that if someone does not know how to trade, then he should not increase his losses using margin.

Well, the leverage thing advice of Vitalik Buterin for me is for sure only applies to him or that is what he is really using.
But for me, it really depends, depends on risk tolerance as other successful traders are using more than 2x leverage, it really depends.
For sure he also have some reason why is and that's how he really trade, where you can say it is less risk.

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.

Vitalik Buterin's advice to avoid using more than 2x leverage in trading is ABSOLUTELY wise.


It helps US to manage risk in the highly volatile cryptocurrency market....

It's crucial to distinguish between traders and investors, with traders using lower leverage for safety....

Asset security in noncustodial wallets is essential. Leverage suitability depends on an asset's volatility, and high leverage can lead to liquidation, as seen with TRB's price drop. Responsible trading involves assessing risk tolerance and market conditions while prioritizing asset security and control...

I think it should depend on the accuracy of the trader in that particular trading position or trade. What the source said is true: don't use 2x the leverage as it will also raise the risk and the amount to be lost if, for instance, if you are not sure about your trade, then don't do it really because it will only burn your trading account. Leverage is a very dangerous thing to manipulate when trading.

So if you are a trader who is sure about the position you will open and confident enough to risk it, then you can raise the leverage for a greater reward or profit, but this is not applicable for those who go short. Yes,  they might earn depending on the volatility of the market, but they can't maximise the potential profit, so it's better to go long when trading bitcoin. There are a lot of things to be learned in crypto trading, and manipulating risk and leverage is one of them.

Trading “futures” with higher capital without “Leverage”?

How is this possible? or, you probably meant trading spot?
I can't imagine any scenario where one can trade futures contracts minus applying leverage. Even if it's 1x, there is still leverage involved and the position will also have a liquidation price.

Totally agreed .Its very risky for any traders to over leverage when opening positions will be much better to accumulate small profits than go for a huge one and get liquidated easily ,I have lost so much over-leveraging during my days as a new trader  with time i have since learnt my lessons and refrain from such bad trading habits.

Actually he is just saying the truth, if you enter a long position in Bitcoin with 100usdt with 2x leverage, it's near impossible for you to get your account liquidated.
If you buy long from 42000 dollars, Bitcoin will have to fall up to five thousand dollars for you to get liquidated, so he is actually right about it.
Me I even prefer to trade futures with higher capital without leverage than do anything leverage trading, in such senario, your duty is to wait for Bitcoin to rise to your desired amount, then cash out big time.

This is part of a list if I'm not mistaken, and based on my understanding this is all tips he gave to people who are looking to invest in the crypto space as newbies. Despite that however I don't think what he's saying couldn't be true for us pros, as even us fall short sometimes especially when it comes to our price predictions and positions.

2x leverage to me is nothing more than a gamble that's stacked against you. moreso if you're an investor since what you're only ever expected to do as one is hold your coins and reap the profits eventually. Having to go so far and greedy to take a 2x leverage is a massive bullet in the head that could literally kill your momentum as a trader and eat all your investments away. Traders can still pretty much survive this as you have said since most of them know what their risks capacities are but I seriously advise against it as well on the account that it kinda is harder for traders to recuperate their momentum and assets especially if you have 2x leverage on all your positions. But who knows? Honestly it all boils down to how much risk you can take as a trader and less about the 2x leverage itself. Personally I think it's a massive risk that you shouldn't take even if the profits look appealing, my opinion could differ to everyone.

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.