💣 Why leverage in futures is basically dynamite
1. Multiplies losses (not just gains)
Leverage is like giving steroids to your trade… but without your own brain.
If you use x10 and the price goes 1% against you, you lose 10%.
A small mistake → damaged account
2. Liquidation: the nuclear button
In futures, you don't “hold” like in spot.
If the price reaches a certain level, the exchange automatically closes your position.
Result:
You lose EVERYTHING you put into that trade
No chance to “wait for a bounce” (that classic self-deception)
3. The market does not respect your ego
You can have nice analysis, Fibonacci, ICT, whatever you want...
The price can also do:
Liquidity sweeps
False breakouts
Violent movements
And with high leverage, those small movements get you out.
4. Volatility = silent enemy
Crypto is not exactly stable (surprise).
A normal market movement can be enough to:
Get you out of the trade
Liquidate you
Make you doubt your existence
5. Overconfidence (the classic killer)
You win 2 trades with high leverage and you start thinking you're a mix of:
Warren Buffett
and a YouTube guru with a rented Lamborghini
That's where you increase the risk... and the market knocks you off your pedestal.
6. Funding fees (the slow bleed)
If you keep positions open:
You pay or receive funding
But many times you end up paying
It's like an involuntary subscription to losing money.
7. Disaster emotional management
With leverage:
Every candle seems like a personal attack
You make impulsive decisions
You close at a loss and then the price goes in your favor (classic trader trauma)