He once owned 370 bitcoins, but ultimately died on "up to 3x leverage" | Many people were not mentally prepared for "losing this money"! I hope everyone can compare their appearance in real trading scenarios and see if the characters in these stories are just like you! If so, it would be very dangerous. I have said before that most people may have been in the industry for many years, using contract leverage every day, but in fact, they have never truly understood what leverage is, which is the most dangerous thing; Also tell me a story I personally experienced: A few years ago, a friend of mine introduced me to an old man from Shandong. Due to some debts, the old man was eager to find a good project or product and get results. At that time, he had millions of assets in the stock market, After listening to his current situation, I feel that he should withdraw from the stock market. Shandong Laoge has talked to me several times, and he is very smart and can understand the advice I gave him and the characteristics of Bitcoin. At that time, it happened to be a relatively low level for Bitcoin, and soon caught up with the 312 major drop, He took my advice and bet heavily on Bitcoin, buying over 370 bitcoins at its peak. Soon after, it was a bull market, with assets rising more than 20 times. This money was a huge asset for him, not only to pay off debts but also to make a comeback. If he was lucky enough to get what he currently has, he would be a definite winner in life. Unfortunately, this Shandong guy did not continue this myth. We didn't have much contact for a period of time. When we heard from him again, three years later, his family came to me for consultation on some judicial issues because he was arrested for illegal fundraising. He had mentioned to his family that I knew more about this. I'm surprised, how could you illegally raise funds with such a large asset? Later on, I discovered that the root of all this evil was leverage! I have always felt guilty because I told him about the investment target of Bitcoin, but at first, I was happy for him when I found out he had over 300 Bitcoin. But he didn't expect to discover contracts and leverage during his later exploration. According to his wife, in the first month of contact, he earned over 20 million yuan and felt like the most amazing trader in the world. His wife said that during that time, she felt that money was not money because it came too quickly and she didn't cherish it very much. She spent it recklessly, but she fell in love with that feeling and it became uncontrollable. There were a few times he called me to inquire, and I sincerely advised him not to touch these things. His response to me was also: It's okay, I'm only 3 times leveraged at most, usually controlled at 2 times leverage, it's not a big problem. We didn't have much contact until two years ago when I found out he had an accident. His wife and family consulted me on judicial issues and helped lawyers sort out the flow of funds. I was shocked when I opened his exchange account and also learned the reason for his illegal fundraising. First of all, this old man was very lucky and powerful. He decisively sold Bitcoin at its high point in 2021 and lived up to expectations, reaching A9. He also paid off his debts with tens of millions of dollars and bought a villa and Porsche for his family. According to his wife, at that time, he really felt like God had opened his eyes and everything was getting better. Then the turning point occurred at the end of 2021, when I discovered the exchange's records. His first trade opened with a leverage of $80000 and he went long on Bitcoin, coinciding with the trend tailwind. He continued to go long and indeed turned $80000 into over $2 million in just over a month. I think that's why he kept relying on contract leverage in the future, which is actually the biggest obstacle. In the following months, making money didn't go so smoothly. In order to get the results, he became stunned. I saw that his account was very crazy. For nearly half a year, he received around 800000 RMB in daily transactions. Every day! Then the number of orders per day becomes even crazier, with the highest frequency being from around 10am in the morning to around 12pm in the evening, with almost no interruption in between. The so-called leverage of no more than 3 times was indeed true at first, but soon after, or occasionally, in order to recoup costs, it may increase to 10 times, and even I have seen several orders with higher leverage, with 20 times even becoming commonplace in the later stages. So the Shandong guy became a gambler completely! Obviously, no matter how large the assets are, they cannot withstand this kind of turmoil, so they quickly lost all their money. Then, in order to catch up with the cost, he used his cautious network to outline a false project and promised many friends high interest rates to borrow money. However, in fact, all the borrowed money entered the contract market, and he continued to deposit hundreds of thousands of yuan every day. So in less than half a year, some friends were unable to pay their monthly interest, and everything collapsed suddenly. He was also personally sent in by his friends. Sighing endlessly! Just like the story Mandy talked about in the following article, what is truly exposed here is not leverage, but human nature: low leverage is the most dangerous illusion for ordinary people. Once you use leverage, whether it's 1.2 times or 100 times, you have already left the spot world and entered another set of survival rules. This set of rules has never been seriously considered by most people, they just think they can make money and rush in crazily, even calling it 'Go for a bike and turn it into a motorcycle!'! Little do you know, this is actually the devil's door opening for you. one ️⃣ Spot thinking vs. leverage thinking. Leverage is not a multiple issue, but a switch in survival rules Once you use leverage, whether it's 1.2 times or 100 times, you're already out of the spot world, Unconsciously entering a game dominated by the sequence of fluctuations, retracement paths, and emotional resilience. two ️⃣ Being accurate and executing are two different things. Getting it right "is not important in leveraged trading, execution is the lifeline. Countless people have made correct directional judgments, but died from decision distortions caused by position management, stop loss execution, and continuous declines. Because human greed and fear are what make you unable to stop during execution, the feeling of losing control when reviewing is an insurmountable obstacle. Don't deceive yourself when it comes to investing. Most people who fall into a trap in one place will probably continue to do so, and there is generally no such thing as learning from their mistakes. three ️⃣ Greedy infinite amplification Low leverage is the most dangerous illusion for non professional traders It makes people give up their reverence for position, risk control, and stop loss, Using the methods of 'still able to bear' and 'make up for it a little more', hoping to recover losses and become familiar with them, but unconsciously amplifying risks infinitely. It's the same as being unconscious in a casino. Conclusion—— So you see, the real problem for many people is never how many times the leverage has been increased. But they have never done any psychological exercises for 'losing this money'. Once money starts coming quickly, people will automatically assume that it will continue to come. Once a loss occurs, people will automatically assume that as long as they hold on for a while, they can come back. The scariest thing about leverage is not liquidation, but that it pushes you from being an "investor" to being a "gambler" before you even realize it. Once a person starts the gambling track, they cannot return to the normal track because the gambling track is too exciting and enjoyable. People who have experienced that kind of pleasure can only say that real investment is boring. So the real question is not: Can I use low leverage But instead: If you're a normal person, it's best not to touch your damn ones!