The right way:
With 10k and $ASTER in a dip, using 50x lets $200 control $10k
Liquidation level = 0
No additional capital is added unless a flash crash occurs, in which case another $200 would be used to control $10k
Liquidation level ≈ 45% below the dip bottom → V-shaped recovery = big profit
The wrong way:
Only 10k available. Assuming $ASTER won't drop 20% back to 1.50 and using 5x to turn 10k into 50k. This causes constant stress and sleepless nights as the price nears liquidation, even if it's still 10% away
Do not use leverage to take positions larger than the portfolio
Use leverage only for flexibility
The right way:
With 10k and $ASTER in a dip, using 50x lets $200 control $10k
Liquidation level = 0
No additional capital is added unless a flash crash occurs, in which case another $200 would be used to control $10k
Liquidation level ≈ 45% below the dip bottom → V-shaped recovery = big profit
The wrong way:
Only 10k available. Assuming $ASTER won't drop 20% back to 1.50 and using 5x to turn 10k into 50k. This causes constant stress and sleepless nights as the price nears liquidation, even if it's still 10% away