Do not use more than 2x leverage
Do not use more than 2x leverage
I am referring to Vitalik Buterin, one of the ethereum founders post on Twitter that states that people should not use more than 2x leverage.
Don’t use >2x leverage. Just don’t.
It is one of the things he listed as a financial advice. As a trader, what do you think about it? We set some money aside for trading and as for me I still use up to 2.5x leverage for bitcoin to open a long position.
I think using this low leverage is good for traders. But investors should not use leverage at all. Investors should even supposed not to leave coins on exchanges but moved the coins to a noncustodial wallet.
This is also not applicable to many coins that are very volatile in a way that 1x leverage can even lead to liquidation of asset. See what happened to TRB recently that fall from almost $700 to $125.
Actually he is just saying the truth, if you enter a long position in Bitcoin with 100usdt with 2x leverage, it’s near impossible for you to get your account liquidated.
If you buy long from 42000 dollars, Bitcoin will have to fall up to five thousand dollars for you to get liquidated, so he is actually right about it.
Me I even prefer to trade futures with higher capital without leverage than do anything leverage trading, in such senario, your duty is to wait for Bitcoin to rise to your desired amount, then cash out big time.