If I were trading millions of dollars, I would choose spot over futures.
But for some reason, many people like to use high amounts of leverage... are they that greedy?
Not many people that have a lot of money like million dollars want to go for spot trading and leave futures trading which is full of risks when compared to spot trading. Most of them go for highly risky trades to give them huge income immediately which they can’t wait patiently when it comes to spot trading. Spot trading gives bigger profit when you trade with large amount of money, but not many of them that have lots of money even look into that direction to earn cool money with less risk applied.
We may all agree here that 25x is too much leverage to use in futures, but it will not change the fact that there are many traders making profit in futures with that amount of leverage. Some of these traders either have a low account size, and using the leverage like 25X is alright for them, while others really are very confident in their analysis and, based on the psychology level, are able to leverage up to that amount.
Never say never.
I don’t really see the leverage been used by a trader as the basis of whether he has over risked his trade or applied proper risk management to his or her trades. It is always the capital first that will determine if the leverage they’re using for a trade is okay or way too much for them that they’ll get liquidated. It’s all a game of understanding and those that knows how to trade better, play around leverage and still make good profits.