Best Leverage for Crypto Trading: Complete Guide 2025
"What leverage should I use?" is one of the most common questions from crypto traders. The answer is not a single number; it depends on your style, risk tolerance, and asset. Here is a clean way to find your optimal leverage.
Quick Summary
- Scalping: 10x-25x (tight Stop Loss, fast in/out)
- Day Trading: 5x-15x (medium time frames)
- Swing Trading: 3x-10x (wider Stop Loss needed)
- Beginners: 2x-5x (learn first, leverage later)
How Leverage Works
Leverage amplifies both gains and losses. With 10x leverage:
- A 5% move in your favor = 50% profit
- A 5% move against you = 50% loss
- A 10% move against you = 100% loss (liquidation)
Leverage vs Distance to Liquidation
| Leverage | Distance to Liq | Risk Level |
|---|---|---|
| 3x | ~33% | Low |
| 5x | ~20% | Low |
| 10x | ~10% | Medium |
| 25x | ~4% | High |
| 50x | ~2% | Very High |
| 100x | ~1% | Extreme |
Leverage by Trading Style
Scalping (10x-25x)
Scalpers hold positions for seconds to minutes, targeting 0.1%-0.5% moves. Higher leverage makes sense because:
- Stop Loss is very tight (often a few pips)
- You are in and out quickly, reducing exposure
- Small moves become meaningful PnL
Requires high win rate and fast execution
Day Trading (5x-15x)
Day traders hold for hours and target 1-5% moves. Moderate leverage works best:
- Stop Loss is typically 1-3% from entry
- Needs room for intraday volatility
- Balances amplification and safety
Best for most active traders
Swing Trading (3x-10x)
Swing traders hold for days to weeks and target 10-30%+ moves. Lower leverage is essential:
- Wider Stop Loss is required
- Price often retraces before continuation
- Overnight/weekend gaps can be dangerous
Consider Funding Rate for longer holds
The Right Way to Think About Leverage
Instead of asking "what leverage should I use?", ask:
Better questions:
- How much of my account am I willing to lose on this trade? (1-2%)
- Where is my Stop Loss?
- What position size gives me that risk?
- What leverage do I need to reach that position size?
This risk-first approach makes leverage a tool to execute your plan, not the starting point of the decision.
Common Leverage Mistakes
Using max leverage "for fun"
One bad trade can wipe weeks of gains.
Same leverage for all coins
A meme coin can move 20% in an hour; BTC usually does not.
Increasing leverage after losses
Revenge trading with more leverage wipes accounts faster.
Calculate Your Optimal Position Size
Use our calculator to find the right position size and leverage for your risk tolerance:
Open Position Calculator