People often ask, what exactly is leverage? To be honest, it’s not some magic that makes you rich overnight. Instead, it’s an amplifier that increases your heartbeat and profit or loss by 5 times, 10 times, or even 100 times.

To explain simply: you have 1 dollar of principal, borrow 4 dollars from the platform, and make a trade worth 5 dollars in total. At this point, the situation becomes—

Making money? Calculated based on 5 dollars profit, it’s great. But what if you lose money? The loss is also calculated based on 5 dollars. Your 1 dollar principal could be gone in the blink of an eye.

It sounds like trading, but actually you’re betting on “liquidation speed” and “heart’s endurance.” Just a 1% market fluctuation could shrink your principal by 5%, 10%, or even wipe it out completely. High leverage is a fast track to liquidation—there’s no fancy trick here.

So what should beginners do? Remember these three points:

First, don’t touch high multiples as a beginner. 5x or 10x is enough to feel the amplification effect. 100x is not a path to wealth; it’s a suicidal move.

Second, always set a stop-loss when opening a position. Just like wearing a seatbelt when driving—without a stop-loss, if something goes wrong, you’re out immediately.

Third, don’t treat leverage as a strategy. It’s a tool, not a way to make money. Your core competitive advantage should be judging the market direction, not betting on high multiples.

In one sentence: think of leverage as a knife in your hand. It’s fine for chopping vegetables, but don’t play with fire. To survive longer in the futures market, you must prioritize risk management.