🔴Simple risk management strategy for futures trading🔴

Let's say you have 100 USD to trade.

1. Position sizing with leverage:

Make sure your total position, including leverage, does not exceed 100 USD. For example, with 50x leverage, your deposit will be no more than 2 USD. This keeps your entire position within $100, preventing liquidation as the position is fully hedged with your funds.

2. Why and when to use leverage:

Using 5x leverage means you borrow 5 times your money, while 50x leverage means 50 times. Higher leverage increases risk; Trading with a position larger than your amount will result in a liquidation point. By keeping leverage in your total funds, you can avoid liquidation.

3. For example:

Open a position with 1 USD margin and 50x leverage, creating a 50 USD position. If the selected cryptocurrency increases by 1%, you have earned 50% of your deposit ($0.50). A 10% movement will result in a 500% gain on your deposit ($5 on your $1 deposit).

🔴 Key points:

Always keep a leveraged position in your total funds to avoid liquidation. Leverage offers greater potential profits but also increases risk. Use it wisely to manage positions and trades safely and efficiently. $BTC