Whenever you use leverage, there is always the risk of liquidation. Even with 2x leverage in a full position trade, you can get liquidated within a single day. Even Bitcoin can drop drastically under extreme conditions. For example, during the "312 crash," Bitcoin fell from $8,000 to $3,800. A 2x leveraged full position would have been force-liquidated.

Ignoring fees and other trading costs, the price movement required for liquidation in a full position can be calculated as:

Liquidation threshold = 1 / Leverage × 100%

For example:

• With 5x leverage, a 20% adverse price move will cause liquidation.

• With 10x leverage, only a 10% reversal is needed.

• With 100x leverage, just a 1% move in the wrong direction results in liquidation.

Thus, it's essential to keep your true leverage within a safe range.

What Is True Leverage?

Many traders copy well-known influencers (KOLs) who use 100x leverage. They assume they can do the same, but while the influencer survives a 5% fluctuation and even adds to their position, the copycat gets liquidated with less than 1% movement. This is because they don’t understand what real leverage means.

True Leverage = Position Value / Total Available Margin

For example, in full margin mode, using 100x nominal leverage but only opening 1% of the full position means your position value equals your available margin—effectively using no real leverage.

So, the nominal leverage doesn’t matter—what matters is the position size, i.e., how much leverage you're truly using.

As for how to decide on a proper position size, you can refer to the Kelly formula, but we won’t elaborate on that here.