Leverage is a powerful tool in trading—especially in futures and copy trading—where small price movements can lead to amplified gains. However, with great power comes great risk. Using excessive leverage can quickly turn profitable trades into significant losses, particularly when market volatility spikes. This guide will walk you through how to use leverage wisely in copy trading, minimize risks, and protect your capital over the long term.
Whether you're new to copy trading or refining your strategy, understanding leverage is essential. We’ll explore the dangers of high leverage, practical steps to adjust it, and the benefits of keeping it low—particularly at or below 20x.
👉 Discover how smart leverage management can improve your trading performance today.
Understanding the Risks of High Leverage in Copy Trading
Copy trading allows you to mirror experienced traders’ moves automatically. While this simplifies decision-making, it doesn’t eliminate risk—especially when high leverage is involved. Data from leading platforms shows a growing number of users facing liquidation due to over-leveraged positions.
When you use high leverage (e.g., 50x or 100x), even minor market fluctuations can trigger margin calls or full liquidation. Here’s what makes high leverage particularly risky:
- Amplified Volatility Impact: High leverage magnifies both gains and losses. A 2% drop in price with 50x leverage equals a 100% loss of your margin.
- Increased Liquidation Risk: Positions with high leverage are more likely to be liquidated during adverse market moves, especially in fast-moving markets.
- Compounding Losses Over Time: Repeated small losses due to over-leveraging can erode your portfolio steadily, undermining long-term profitability.
In short, while high leverage may seem attractive for quick returns, it significantly increases the chance of losing your entire investment.
How to Reduce Your Leverage in Copy Trading
The good news? You have full control over your leverage settings—even when copying others. Here are three simple ways to adjust your leverage on most advanced trading platforms:
Method 1: Set Leverage When Starting a New Copy Trade
- Navigate to Copy Trading > Market Board.
- Choose a trader you'd like to follow.
- Click Copy Now > Advanced Settings > Contract Settings > Leverage.
- Adjust the leverage level before confirming your copy.
📌 Pro Tip: Always review contract settings before copying. Default leverage might be set higher than recommended.
👉 Learn how to customize your copy trading settings for better risk control.
Method 2: Modify Leverage for Existing Copy Trades
- Go to Copy Trading > Market Board.
- Select My Copies > My Traders > Edit > Advanced Settings > Futures Settings > Leverage.
- Change the leverage value according to your risk tolerance.
This method lets you fine-tune ongoing trades without stopping them entirely—ideal for adapting to changing market conditions.
Method 3: Adjust Leverage via Manual Trading Interface
If you're also managing manual futures trades:
- Visit the Trading Page.
- Under Isolated Margin Mode, adjust the leverage directly for individual contracts.
This gives you granular control across all your positions, whether copied or self-managed.
Important Recommendation: To protect your assets, keep futures leverage at 20x or lower across all positions.
Why Low Leverage Leads to Smarter Trading
Choosing a lower leverage isn’t about playing it safe—it’s about trading smarter and sustaining success over time. Here’s why limiting leverage improves your trading outcomes:
✅ Better Risk Management
Lower leverage reduces exposure to sudden price swings. Instead of risking total loss on a small move, you maintain breathing room during volatility. This makes your portfolio more resilient and less prone to emotional decision-making.
✅ Reduced Liquidation Probability
With less leverage, your margin requirements are higher relative to position size, meaning the market needs to move further against you before liquidation occurs. This buffer is crucial during unpredictable events like news spikes or flash crashes.
✅ Sustainable Long-Term Growth
Low-leverage strategies encourage patience and discipline. You’re less likely to obsess over short-term charts and more focused on consistent performance. Over months and years, this approach often outperforms aggressive, high-risk tactics.
Frequently Asked Questions (FAQ)
Q: What is the recommended maximum leverage for copy trading?
A: Most experts and platforms recommend keeping leverage at 20x or below to balance opportunity and risk effectively.
Q: Can I lose more than my initial investment with leverage?
A: On regulated platforms with isolated margin systems, no—you can only lose the amount allocated to a specific position.
Q: Does lowering leverage reduce potential profits too?
A: Yes, returns are proportionally smaller—but so are losses. The goal is consistency, not explosive gains that carry extreme risk.
Q: Can I set different leverage levels for different traders I copy?
A: Yes, advanced copy trading interfaces allow per-trader customization, including independent leverage settings.
Q: Is 1x leverage too conservative for copy trading?
A: It depends on your goals. While very safe, 1x may limit growth potential. Many traders find 5x–20x offers an optimal balance.
👉 See how top-performing traders manage leverage for steady returns.
Final Thoughts: Trade Smarter, Not Harder
Successful trading isn’t about chasing the highest possible returns—it’s about preserving capital while achieving sustainable growth. High leverage might promise quick wins, but history shows it often leads to early exits.
By setting a disciplined cap—such as 20x—you align yourself with long-term success. You reduce stress, avoid unnecessary liquidations, and build confidence in your strategy.
Before starting any copy trade, take a moment to assess:
- The trader’s historical drawdowns
- Market volatility levels
- Your personal risk tolerance
Then, set your leverage accordingly.
Remember: The best traders aren’t those who make the most in a week—they’re the ones still in the game after years.
Start building your resilient trading strategy today—with smarter leverage choices that protect your future gains.