Many people see 1000x leverage contracts and think of liquidation, but there is actually a rigorous mathematical logic behind it.
Let's first discuss the core asymmetry of profit and loss. Suppose you open a 5U long position on BTC with 1000x leverage; your potential loss is only that 5U, but your potential gain could be 500U or even higher—this risk-reward ratio of over 100 times may seem crazy, but it relies on accepting a probability distribution of "99 small losses for 1 big win."
**Primary Principle of Account Setup**
A 1000x contract is not a savings tool; it's more like a pure probability game. I set a limit of 300U per trading account. How is this number determined? Simple—ask yourself if losing this entire amount would affect your life. If yes, then halve it again. This 300U should either end up zero or be withdrawn as profit; there’s no repeated adding to the position.
Many beginners make the mistake of increasing their account from 200U to 600U after a win, which directly violates the principle of fixed capital. Contracts are probability games and do not support compound interest strategies.
**Cost of Validating the Logic**
Before you clearly confirm that "your judgment is correct," it’s not worth risking too much. My approach is to keep the total position at 300U, opening only 5 to 30U for the first trade—using no more than 10% of the capital to test your judgment.
The real scenario is like this: the market hovers at a critical point, you have an idea but are unsure, so you place a 5U 1000x contract. If your direction is correct, that 5U could turn into a 200U unrealized profit. At this point, you've validated your idea at the cheapest cost. Beginners might go all-in with 300U, but I prefer to buy certainty with 5U—costing 300 times less.
**Why the number 300U**
For example, with total assets of 100,000, 300U accounts for only 0.3%. Losing it all is like losing a small change, with little psychological pressure. But if you get one correct judgment—turning 300U into 30,000U—that’s equivalent to a 30% increase in total assets. This embodies the beauty of asymmetric risk-reward: using minimal risk exposure to pursue disproportionate gains.
**Honest Self-Check Before Starting**
Before proceeding further, ask yourself a few questions: Can you truly cap your position at 300U? When you lose 10 times in a row totaling 3,000U, can you stay calm? Do you really understand that probabilistic advantage does not mean winning every time?
If any answer is "no," then the 1000x leverage contract game may not be suitable for you.
Mainstream cryptocurrencies like BTC and ETH are the most active under 1000x contracts, but the rules of the game are always the same.