When it comes to 'low leverage', do you think it is a low-risk, stable option? But do you really believe it’s that 'stable'?
In fact, it’s just that it looks not very dangerous, but the actual risks may go unnoticed by you.
The dealer's 'black hand' is never absent
Imagine a sudden 50% market crash, or a gradual drop to 70%. By the time you’re ready to be patient and wait for the market to stabilize, you might find yourself already thrown out by the market. Or just when you think about entering, a sudden fierce operation sweeps you out.
The risk of leverage is like underwater reefs, always ready to capsize you.
Low leverage is actually less 'stable' than you think
Some people think that taking a 40% position with double leverage is about right, feeling completely secure. It seems there’s no problem, but if you think about it, it’s actually akin to trading spot, just with an 'extra cost'.
If you hold a position for a long time, that little bit of funding rate is like slowly pressing down on you, potentially making it hard for you to breathe. Low-leverage contracts, unless faced with extreme market conditions (like wild market fluctuations), do not show any significant advantages.
If you want to amplify returns, it's possible for experts to use high leverage, but for most people, the risks of this approach are magnified exponentially.
Spot trading is the most stable 'lifesaver'
In contrast, spot trading is the most reliable choice. When the market rallies, spot trading can also bring you substantial profits without the need to take on leverage risks; if the market is stagnant, not losing is equivalent to making profits. The key is, as long as you don’t chase highs, steady profitability is basically not a problem.