What leverage actually is
Leverage lets you control a position larger than your account balance. With 10x leverage, ₹10,000 of margin controls a ₹1,00,000 position. Your profit and loss are calculated on the full position size, not on your margin — so a 1% move in your favour is a 10% gain on margin, and a 1% move against you is a 10% loss.
The trap is that traders see the upside and forget the symmetry. Higher leverage doesn't increase your edge; it shrinks the distance between your entry and the price that ends the trade for you.
How liquidation price is calculated
Liquidation happens when your losses consume your margin and the exchange force-closes the position to avoid negative balance. Roughly, the higher your leverage, the closer the liquidation price sits to your entry.
As a rough rule for an isolated-margin long, the price can fall by about (100 / leverage)% before liquidation, minus fees and the maintenance margin. So 10x liquidates near a ~10% drop, 25x near ~4%, and 50x near ~2% — moves that happen routinely in crypto.
Because maintenance margin and funding eat into that buffer, the real liquidation price is always a little closer than the simple estimate. Never trade to the theoretical edge.
Sizing so a normal pullback can't kill you
Pick your stop-loss first, based on the chart — then choose leverage so your liquidation price sits well beyond that stop. If your stop is 5% away, trading 20x (which liquidates near 5%) means a wick can liquidate you before your stop even triggers.
A safer frame: decide the rupee amount you're willing to lose on the trade, set the stop where your thesis is wrong, and let position size follow from that — not from the maximum leverage the exchange offers.