Bitcoin Forum

Hi,

From your experience in futures trading, what's best considering the risk/profits: trading with large volume from your capital but with low leverage (even doing spot trading) or trading small volume but combined with high leverage?

Can you also give concrete examples of the used amount + leverage per trade/position?

thanks

For me, the more your leverage is high, the more risky, the high leverage, the price liquidation is closer to your entry price so your trade position may liquidate in just a short period of time or in an abrupt pump/dump.

If you go ask some traders or watch some videos or read some trading books/articles, for sure you can't see the author or professional traders advising high leverage for every trade.

Don’t count your chickens before they hatch, OP. Instead of thinking about how much you could profit with a strategy, think about how you can lose in each sizing. Plus get your answers by back-testing your strategy before implementing them. Don’t trust people in the forum, verify. 8)

Hodling gives profits IF you do as follows

• Choose a right coin to invest (hodl). The best is bitcoin
• Hodling means Spot trading if you store your bitcoin on exchanges

Spot trading means no leverage. Your statement is not accurate as you wrote low leverage for spot trading.

Trading can give your profit or loss but most of traders end with losses. Serious losses will find them with Leverage/ Margin tradings.

Don't join the so-so gambling trading: Leverage/ Margin trading IF

• You don't have 4 years of experience in crypto market and in crypto trading.
• You don't have good rate of successful trades with Spot trading
• Leverage: x2 or x3 and even with low leverages, please afford your loss with margin call and liquidations

The higher the leverage you use, the closer you are to losing your money. In addition, the less leverage you use, the better you sleep at night. Using a large volume of capital in a single trade is also a violation of the trading strategy and leads to a loss of money.

The result of trading with high volume and low leverage or trading with low volume and high leverage is more or less the same. They are both very risky and may cause you to lose all your money. You should know that the higher the leverage the more the amount of money that you can lose in a single trade.
You probably have forgotten and should have include it in your question how that you should trade with a moderate amount of money (preferably one you can afford to lose) and using a moderate sized leverage.

All options have their own benefits and risks. However, it was very risky for me to trade using high leverage. Take leverage if you are able to manage it, if you can afford it with high leverage, it will reduce the risk that will occur. Although the benefits obtained by using high leverage will be very large, but think about it first, what the risk of loss is too. Don't be fixated on profit first, because it will blind you. Trade according to the capabilities you have.

In high leverage, your calculation error will have a big impact on losses that can be far from your expectations. Every leveraged trade is also accompanied by a Margin Call (MC) feature. MC is a certain margin threshold that must be available in a trader's balance. If the trader's balance falls below this threshold, the broker can close part or all of the trading positions in the trader's portfolio. A trading position that is closed forcibly can be a profit or a loss. This of course is very detrimental to traders. One of the biggest mistakes is over trading, the right decision-making needs to be done to avoid it, because the key to successful trading lies in its management. Both money and risk management. To avoid being hit by MC, use a little model first, about 3-5% to open a position and don't forget the most important thing is to use a stop loss in all your positions.

The solutions to the various high leverage risks are controllable. However, it takes sufficient knowledge and experience to control high leverage. If you are interested in using a higher leverage than usual, you should first test it using a demo account before applying it to your main (real) account.

Sorry guys, I'm a very pragmatic guy, leave theory apart, I am aware of all your advice so I was asking what you are doing just for sharing experience.
I started trading this year after about 2weeks of studying the crypto world, I managed to double my investment in about 50days with spot trading only, a moment when I was hit hard by some pumped alts so I moved to learn futures trading as I was on losing path anyway so I learned a lot from my failed moves, now I am on the moment when I seek experience sharing stories hence my thread.

This is the right approach, people are always thinking about all the profit that they are going to get when they become traders dreaming of how they are going to spend all of that money they will earn, and while there is nothing wrong with dreaming with your eyes open we need to keep them open to the truth, most traders lose money, most traders lose all of their money in just a few years so if you're going to choose that path then you need at first to try to reduce your losses.

This means to avoid using leverage and to avoid markets with very small volumes, yes I know that this is going in theory limit your profits but you were not going to get profits in those markets anyway so you're not really losing anything by doing this.

What you want to first look at is how you will manage your risk. As you are thinking about how you are going to profit. Also think much more about how you are going to lose.
I would favor high volume + low leverage to small volume + high leverage. Of course, I will still be using stop losses on my high volume + low leverage trades to even keep the risk of losing so much of my asset in case things go in the opposite direction at bay.

I have traded high leverages before. That's X50, X40. Trust me out of over 10 trades. I only won once.

Trading high leverages indeed give you out higher profits, but when have traders ever observed trades with profits? Most would actually just minimize their losses instead of maximizing profits since the latter is insanely difficult and risky to do, especially in a volatile market such as the crypto market. Always play around on a set level, it's okay if it limits you since that means it also limits your losses. You can try out plans that maximize your profits when your total profit has grown pretty well, much so that you can afford that much of a loss.

Just all I know that the more you are willing to take your big assets to be trade, is the more chances that the risk is high for sure.
I'm not quite familiar with the leverage, just what I did only is day trading, scalping but very seldom. But limiting you losses is a very good tools
to control your amount of loss assets. but according to what I read to most of the members here in the forum, according to them leveraging is not really effective.

I am just only into spot trading in crypto space but I have availed higher leverage on other trading. When your technical are weak and you are not sure about long term strong trend then you may go for higher leverage but look for short target to book and exit. This way even you are covering only a short term trend, you could make considerably decent profits with high leverage.

When you are good at technical and you have clear stop-loss levels then you can calculate your positions as per your leverage in way it will be not triggering the stop-loss on negative market.

In my own short LOSING experience in day-trading, it depends on the volatility of the coin. Bigger positions for lower volatile coins because the risk is less, and smaller positions for higher volatile coins because risk is more. I believe great traders do not have a fixed size to fit all.

In my opinion, the volume of your funds will define on what kind of Trading you're gonna fit into. For example, you have $3,000, it's good in futures using "cross" margin and lower leverage, and if your funds is small, it's better on "isolated" margin and high leverage.

But if you have like $7,000-$8,000 and up, I'll recommend that use it in spot trading, no leverage, since it is safer than the two that I've mentioned, especially when you're just a newbie in Trading. But if you have a lot of funds, using high leverage (high risk reward) is not bad at all.

High leverage trading are highly risky so you may not execute your trades and take the decisions at the right time due to that added pressure. Since you already successful with spot trading then why not continuing it instead of going for margin trading?

A trader need to know what leverage is before even making an order. Leverage is you having additional money, liquidity given to you by the stock broker platform, or forum that you trading with. Leverage is also like margin trading.

So the risk about leverage is when you don't have adequate self control and controlled emotion and you keep extending your risk level. Leverage trading is sweet when you are on profit because the broker don't have issues with the borrowed liquidity to you but the negative effect of it if you are in a losing trade , the brokers take away there borrowed liquidity to you and you see yourself crashing faster.

Some traders don't understand it or they understand but have decided to take higher risk to use martingale kind of trading. They can profit faster or lose faster. It depends on the direction of the market. Leverage is good and it also has its negative. ;D

I think it is obvious that everyone has their own preference and every trader will make their own system that works. I do not think that there is one right answer for this, I may do a high volume low average and make a profit while you will do small volume but high leverage and make a profit, both of those could happen, also maybe I will try high volume and low leverage but fail while you will profit, or I will do small volume and high leverage and fail and you will profit?

All of these options are available and possible which is why I think it is quite important that we do not end up doing anything that would be perfect for someone else. Whatever you do, whatever you pick, it will be best for you and you should do that, you should not focus on something that would is better for other people, maybe it is good for them but it is not good for you? You should be careful.

I choose future trading and using high leverage but use small capital, like I spend $20 ans using high leverage like 15-20x depend on the coin itself. Because there are some coins who don't allowed you to uss high leverage and use small capital. So as I have no high expectation because I can use money that can afford to lose.

Trading future is really dangerous especially if you just new to trade, moreover if you just come and lack knowledge about technical analyst then most entry that you made will just like gambling. Trading spot is really safe especially at that time, as long as you have a patience there will be a chance for you to get profit because you can hold the coin that you bought although its price meet a correction.

It comes down to position sizing:  no matter if I trade with or without leverage.  I have a specific amount of trading capital and per my trading plan I'm not allowed to risk more then 2% per trade (on usual trades I'm risking 1%).  Before I enter a trade, I calculate my position size to only lose that specific amount of money if I'm stopped out.

The advantage with leverage trading: it binds less of my capital per trade which gives me the chance to open more trades at the same time.

There’s actually little to no difference between the two approaches. They will both give you pain in the ass and I’m serious with that. The risks are painful, even with professional traders.

But for me, I have my pulse with high leverage, the risk is still there but I still have enough control I need to win on my trades but not all the time. I guess we had to go back to basics and follow the rules of trading which is 70/30. Only trade the amount you afford to lose. Because trading is very competitive and sometimes unpredictable.

Good luck!

No one can really give out precise suggestion or recommendations because each of us does really have its own way of trading.It might work into you but doesnt mean that it would work into others.

This one will really be needing self trial on your own if it turns to work out then stick with it, it doesnt matter on what leverage you've been dealing as long you do make gains then
what matter most.Dont rush up and try to be consistent because this is the most priority when it comes to trading.

Good post!


Good point! I believe that I should stop telling everyone who wants to try day-trading to “just HODL”. They should verify, and learn the hard way, what’s truly for them. I’m sometimes concerned that many newbies might lose money unnecessarily, like in my own journey.

The safest form really is still not engaging in leverage trading because here we won't get liquidated and have more time for patience training, learn a little from this mistake in holding decisions whereas in leveraged trades, we do not have the opportunity and time to be patient, the bad mentality is very easy to burn the account. But if someone wants to experience the leverage trading challenge, my recommendation is still small capital and high leverage and choose isolation to avoid excessive loss, low leverage and large capital only make us unable to accept losses and prolong losses until almost all capital is liquidated

You can also lose your capital on the spot market, because everything will depend on the general state of the cryptocurrency market. So in a bear market, your deposit will gradually devalue, unlike margin trading, where the balance will be liquidated faster. So in any case, everything will depend on your trading skills.

Spot trading is definitely a safer method to make profit, in the end it allows you to not lose all your money, in leverage trading you end up losing all of your investment, we are talking about literally going to zero in leverage. However, do you know why people are taking that risk? Because 10% increase in price at leverage that means you could end up with 2x instead with leverage, that is going to be basically just something very profitable if you know what you are doing.

This is why there is nothing shocking about people accepting the fact that they may lose all of their money in leverage trading because they also know that they can easily double their money there as well. I have seen way too many people make too much money and seen people make a lot of loss as well, it is a personal preference thing. I would never do it, it is too risky for me but I understand the ones that does it.

I think people see this in a very wrong way. You should try and measure every trade by risk amount. For example keep a set a dollar risk that you are willing to take in a trade. Now set a stop loss on the trade from your buying price. This reverse calculation would automatically give you the quantity you should buy of that very coin. Now the choice between high or low leverage almost ends as you can decide things based on your Total Capital only. I think this risk-based approach to make this decision will always make more sense.

Here is an example of this: Let's say you have $1000 and today you pick BTC/USD pair which you think can go up by 1% but there is a downside risk of 0.5%. Current price 50000 and you expect it to go to 50500 or a stop loss at 49750. Now you decide the total risk you can take. You decide to take a maximum risk of $50 on this trade. This means at max you can buy a 0.2 BTC. Now pick up the maximum leverage until the liquidation point is below 49750. This way you will always decide capital allocation easily.

When you are just starting then try off first on lesser risk which means stick with low leverage and when you do able to make profits with that then

start on going to big leverage trades but be sure that you do know on what you are doing.Just as said above that on rush up on making profits

because it will just eventually come when you are already aware or knowledgeable.Trade on what fits you the most.

If you are afraid to lose a lot, better to take low leverage. Even the profit is small but if that only be consistent and doing it so well, it still accumulates into bigger profit in the end.
However, most of the time traders will choose those strategies that could give a huge possible return but they never saw possible big losses. That is why we mostly seeing many traders had failed and claim that trading is not for them.

Ive tried it both but I prefer lowest leverage. Its kinda slow to get profits but long to triggered the stop loss and far away from being liquidated. Also, I remembered using higher leverage but you should watch your trade as it can be faster to hit profit or loss.

There are a lot of tools to combined it with your low leverage if you wanted to make a profitable way of trading, learn some of them.

I could not understand the second part of your question: how it will be possible to trade in small volume when you are availing high leverage? Probably you meant that you might have only small capital then you need to go for higher leverage then obviously you will trade in higher volume.

Large volume (by having big capital) and low leverage -> possible and safer trading.

Small volume and high leverage -> lead to higher volume -> high risky trading.

There is another scenario: Small volume and low leverage:
This way you might need to do more frequent trading. Scalping kind of strategy will suit this. As your volume is low then risk is also low but at the same time, profits on each trade also will be lower. To end up your day with big profits then you must trade multiple time within a day which again increase your risk factor.

Most people do not want to do that because it is not interesting, I remember reading a book of which right now I cannot remember the title in which the author mentions that there are two conferences going on at the same time, one of those conferences has to do with entry signals and the place was packed with a lot of people trying to learn the most that they could about entry strategies.

The other conference was about managing your risk and he pointed out that only 10 people were at that conference, he was trying to make the point that people go for flashy things not really realizing that managing your risk effectively is in fact the best way to make money in the markets and yet people never do it.

some concrete examples, do you trade BTC at 75x - 100x ? I trade it at 40x but it moves still too slow in profit / loss

From the little experience am having in future I believe I better you use low leverage to avoid lost of your funds if your laverage is low I believe it won't really be easy for you to be liquidated but you using high laverage is kind of risky have been liquidated so many times due to high laverage so since then I learn to use low laverage to avoid lose of fund whenever you are trading you must learn about risk management first.

Yes, it is all about how you are managing your risk factors.

I guess when you're good in predicting market directions then you can go for high leverage so that you may rarely get liquidated on the event of market goes against you. When you are still learning about technical analysis then it is highly recommended to be sticking with spot trading rather than risking in margin trading.

Only for the people who are having good experience in risk management and money management, it is recommended to get into margin trading with high leverage. Instead of trading in low leverage in margin trading, why not we simply switching into spot trading for better and safer environment to trade with full of peace of mind.

I choose high volume + small shoulder. This is closer to practice and closer to profit. But generally speaking, I would not use leverage at all. What for? If you have a large amount of cryptocurrency, then it is better not to use leverage. This is the world of cryptocurrencies, it is quite volatile in itself. There is no need to use additional leverage here. If you do this, you are exposing yourself to unnecessary risks. Why do you need additional pointless risk?

No one will advise you to use a high leverage either on low or high capital but lost especially on low capital. You need to test this and see how it is. The stories of liquidation you read and hear might sound unreal until you test the waters yourself. Try first with small capital and small leverage. Then see the outcome to. Judge how you wil perform with big capitals.

I guess when your capital is small then there will be no point of availing higher leverage or low leverage; both will be tending to liquidation on the event of negative markets because your base money is small and any multiplication will not help you here. To avoid all these hassles it would be much better just trading with zero leverage or simply getting into spot market.

They need because they want quick and huge profits for same amount of capital. But in my experience minimizing risk will easily get us many small profits over the time rather than looking for one bigger profits through leverage.