Risk Management in Future Trading
To manage risk in futures trading with $100, ensure that your total leveraged position does not exceed your available funds. Using 50x leverage, the margin should be no more than $2, resulting in a $100 position.
This strategy prevents liquidation, as your position remains within your total funds.
Leverage involves borrowing against your funds, and higher leverage, such as 50x compared to 5x, increases both potential gains and risks. The primary danger of high leverage is liquidation if the position surpasses your available funds. For example, opening a position with a $1 margin at 50x leverage creates a $50 position. If the crypto rises 1%, you gain 50% on your margin, or $0.50. If it rises 10%, you gain 500%, or $5 on your $1 margin.
Stay safe & play safe.