Foundations module · lesson 4 of 32
Leverage is sizing, not greed
Speak the market's language: exchange, candle, long/short, leverage, and costs — without this, the rest of the program reads like spellcasting.
Step 1 · Leverage
Leverage = position ÷ deposit.
A BTC 15m long: risk $100, a stop $370 away. The size came out to 0.27 BTC, and leverage followed on its own.
$17 016position$10 000deposit1.7×leverageBTC· 15m · Sep 19–20, 2024real chart · Binance Step 2 · One risk
Same risk, different leverage.
Risk is $100 everywhere. A tight stop inflates the position, a wide one shrinks it.
BTC 4h, the same setup: a stop beyond the sweep $958 away, leverage 0.5×. The risk is the same.
BTC· 15m · Sep 19–20, 2024real chart · Binance Risk = stop × sizescheme Step 3 · Liquidation
The exchange liquidates further out than your stop.
ETH, Aug 4, 2024: a long at 2 722.2, stop at 2 683.0, that's 1.4% below entry. Liquidation at 25× sits further out, at 2 613.
The entry and stop here are an example on real candles, the chart cuts off at the entry: a crash follows. Liquidation is calculated simplified, without maintenance margin or fees.
ETH· 1h · Aug 4, 2024scenario · Binance candles The stop comes before liquidationscheme Step 4 · One candle
Sometimes the stop and liquidation land on the same candle.
BTC, May 19, 2021: the 11:00 candle hit both the 38 600 stop and the 10× liquidation 36 419. With a stop, minus 1R; without, all margin.
entry40 465stop38 600low 11:0036 333A market crash on May 19, 2021. Which one hit first within the hour isn't visible from hourly candles.
BTC· 1h · May 19, 2021scenario · Binance candles Step 5 · Find it yourself
Without a stop, where would 25× have gotten liquidated?
ETH, Aug 4, 2024: the lines show the entry, stop, and liquidation levels. Tap the candle.
Practice on the chart
This is a Find it yourself task: tap a candle or a level, and the lesson tells you right away if you got it.
Create an accountThis step unlocks after sign-up. Your progress is saved.ETH· 1h · Aug 4–5, 2024scenario · Binance candles Step 6 · How it shows up for you
Practice on the chart
This is the How it shows up for you step: the lesson finds trades on this topic in your journal.
Create an accountThis step unlocks after sign-up. Your progress is saved.Step 7 · Rule
The stop and size set your risk, not leverage.
to your PactRisk per trade — no more than 1% of the deposit, whatever leverage you use.
The engine checks the risk of every trade from the journal: above the limit is a rule break, and your streak counts it.
Order: risk → stop → size → leveragescheme
Terms in this lesson
Lessons in this module
Take the lesson with practice
In the app, the lesson checks you on the chart, adds the rule to your Pact, and saves your progress.
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