What leverage multiplier should you open on a contract? This is the most frequently asked question since I started trading.

From beginners to veterans, very few people haven't suffered losses because of this. So today, I will break it down and explain clearly.

**Leverage is not a money-making machine; it’s a double-edged sword**

When used correctly, it can accelerate your gains; when misused, it can turn your money into minced meat. Perpetual contracts have no expiration date; as long as you don’t get liquidated, you can hold them indefinitely—sounds very flexible, but behind this freedom are all kinds of traps. You can enter or exit at will, and your profits can double or even triple, but so can your risks.

A few days ago, a trader told me he often used 30–50x leverage. I asked him in return, "Then why don’t you just max out at 100x?" He said, "Because I get liquidated too quickly." I couldn’t help but laugh.

**The truth is actually quite painful**

No matter what leverage you use, fundamentally, you are walking on a knife’s edge. The only difference is how much reaction time the market gives you.

Taking BTC as an example: opening 30x leverage requires a 16-point price fluctuation to get liquidated; 50x only needs 10 points; 100x only needs 5 points. Change the multiplier, and your risk-reward profile completely shifts. 1x is very stable but grows slowly; 100x is as fast as a rocket, but only if you have ironclad stop-loss discipline, or a single finger slip can wipe you out.

**The real reason for liquidation**

What causes most people to get liquidated is not the high leverage itself, but chaotic position sizing and leaving too little margin. Trying to leverage 50x with only $500 can be wiped out by even a tiny market move. The most painful part isn’t losing money—it’s that your judgment was correct, but you got stopped out early.

Therefore, the key to perpetual contracts isn’t being afraid of high leverage, but whether you leave enough room for yourself. The margin must be able to withstand normal market fluctuations—that’s the bottom line.

**To avoid being wiped out, remember these three points**

First, always use isolated margin mode; never go all-in with full position size. The temptation of full leverage is strong, but once problems arise, everything is lost.

Second, stop-loss must be set strictly and firmly. You cannot have a mindset of holding through—holding a position is essentially signing your own liquidation.

Third, don’t be too greedy with your targets. For example, with a principal of $5,000, earning $50–$100 daily is enough. Stick to compound growth; time will give you the answer—this steady growth is far more powerful than you think.

**The core truth**

Leverage amplifies not the market itself, but your mindset and discipline. Most people lose not because of the market, but because of themselves—impatience and lack of discipline.

Finally, a golden rule: a 100x position with strict stop-loss has a higher safety factor than a 5x position without stop-loss. Perpetual contracts are not sustained by luck; they are sustained by systems and principles. Leverage itself is not wrong; losing control is the real killer.