Post
Topic
Board Trading Discussion
Re: Do not use more than 2x leverage
by
Casdinyard
on 15/01/2024, 15:41:55 UTC
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.
This is part of a list if I'm not mistaken, and based on my understanding this is all tips he gave to people who are looking to invest in the crypto space as newbies. Despite that however I don't think what he's saying couldn't be true for us pros, as even us fall short sometimes especially when it comes to our price predictions and positions.

2x leverage to me is nothing more than a gamble that's stacked against you. moreso if you're an investor since what you're only ever expected to do as one is hold your coins and reap the profits eventually. Having to go so far and greedy to take a 2x leverage is a massive bullet in the head that could literally kill your momentum as a trader and eat all your investments away. Traders can still pretty much survive this as you have said since most of them know what their risks capacities are but I seriously advise against it as well on the account that it kinda is harder for traders to recuperate their momentum and assets especially if you have 2x leverage on all your positions. But who knows? Honestly it all boils down to how much risk you can take as a trader and less about the 2x leverage itself. Personally I think it's a massive risk that you shouldn't take even if the profits look appealing, my opinion could differ to everyone.