2025-12-25 00:23:04

Many traders choose high leverage to "save face" and avoid being accused of having a small capital base. But is this approach really worth it?

Think carefully, top players like CZ, with a net worth of billions, only open positions with around 2 million, which is essentially just a trial position relative to their overall assets. In contrast, many retail investors may only have tens of thousands or hundreds of thousands, yet they insist on using 30x or 100x leverage. What is the logic behind this?

To put it simply, making money doesn't benefit the spectators, and if you get liquidated, no one will compensate you a penny. Rather than calling this a trading strategy, it's more like psychological compensation—using high leverage to make up for internal imbalance.

Of course, this extreme risk strategy often ends with liquidation. Some see it as a regret, but from a market optimization perspective, isn't this a form of "self-correction"? Investors with severely mismatched capital management are eventually eliminated by the market, which in turn protects more rational participants.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

6 Likes

Reward
6
3
Repost
Share

Comment

0/400

BearMarketLightning

· 5h ago

Honestly, that psychological compensation part really hit me hard... 100x leverage is basically shooting yourself in the wallet, isn't it? Liquidation isn't the real tragedy; the real tragedy is treating leverage as a tool for turning things around. The most expensive thing about losing money is actually this breath, right? It's already 2024, and you're still playing with high leverage to show off; might as well just go to a casino. Retail investors should really read this article; don't shoot yourself in the foot by lifting a stone. Can CZ's 2 million test position compare to your 100x leverage? There's a huge difference, brother. Liquidation is the market teaching you how to behave; some lessons only come after paying tuition.

View OriginalReply0

AlwaysMissingTops

· 5h ago

That's incredible. It's exactly the group of buddies around me who keep shouting about 100x dreams, but within a few months, their accounts are wiped out. Honestly, if you can't play, just don't pretend. What's the point? Getting liquidated is just deserved. Who's to blame? Leverage is just an amplifier. Greedy people end up getting completely eaten. Psychological compensation hits right in the heart. There's nothing wrong with that. Instead of high leverage, it's better to learn how to survive longer. Retail investors' lives, indeed, no one will feel sorry for them.

View OriginalReply0

CexIsBad

· 6h ago

100x leverage is purely a gambler's mentality, stop fooling yourself --- Honestly, if someone dares to go all-in, don't blame the market for being ruthless --- Haha CZ casually plays with 2 million, while we bet our entire net worth with 100x leverage, the gap... --- Instead of pretending to be impressive, it's better to learn to cut losses, really --- Only at the moment of liquidation do you realize what self-correction means—it's a bloody lesson --- Money management is the first lesson; high leverage only makes you lose faster --- Psychological compensation is spot on, it's just about wanting to prove oneself --- Winning and acting like a big shot, losing and blaming the market—these routines are tired --- The market has its own rules; those who play with fire will get burned sooner or later --- Retail traders going all-in are just market sacrifices, no problem

View OriginalReply0