Learn / Position size and liquidation
Risk
Position size and liquidation
Leverage does not change the direction you need to be right. It changes how far the price can move against you before the venue closes the trade for you. That distance is the whole point of writing the number down before you click.
Notional, margin, leverage
Notional is the size of the position. Margin is the collateral you post. Leverage is notional divided by margin. A $10,000 position with $1,000 of margin is 10× leverage. The other $9,000 is not a gift. It is the gap the price is allowed to eat.
A teaching formula
For a long, isolated, USDT-margined perpetual, a rough liquidation price is entry times (1 minus 1 divided by leverage), then adjusted a little further against you for the maintenance margin. At 10× with a 0.5% maintenance assumption, the distance is about 9.5% below entry. At 50× the same assumption, the distance is about 1.5%.
Shorts mirror this above the entry. These sketches ignore fees, funding, insurance funds, tiered maintenance, and the difference between last price and mark price. Real venues liquidate on the mark, and the maintenance rate depends on notional. Use the venue’s own calculator for an order. Use ours on the practice desk only to see the shape of the math.
What to decide first
Decide the dollar loss you can accept, then the distance to invalidation, then the size. Traders who start from the leverage slider do this backwards. A wide stop with small leverage and a tight stop with high leverage can lose the same dollars. They do not feel the same, because the tight one gets closed by noise.
Nothing on LiquidityFlow submits an order. If a number on the practice desk and a number on the exchange disagree, the exchange is the one that will liquidate you.
Questions
Will this formula match Bitunix, BloFin, or MEXC?
Not exactly. It is an isolated-margin sketch with a fixed 0.5% maintenance assumption so you can see how leverage moves the level. Each venue publishes its own tiers.
Does 100× mean the profit is 100 times larger?
It means gains and losses on the margin are about 100 times the underlying move, until liquidation or until you close. The loss is capped near the margin. The path to that loss is short.