Crypto Leverage Risk Simulator

Why High Leverage Destroys Accounts

Leverage amplifies both gains and losses. Very high effective exposure can leave little room for normal price movement:

• Liquidation speed: In a simplified isolated-margin example, a 2% move against a 50x position can consume the margin assigned to it.
• No room for error: Stop losses become irrelevant when liquidation happens before they can trigger.
• Funding costs: Funding applies to notional exposure, so larger positions create larger funding debits or credits.
• Path risk: A directionally correct thesis can still fail if liquidation comes before the anticipated move.

Exchange Setting vs Effective Exposure

These are different concepts. TargetHit Auto-Trade uses cross margin and never sends a leverage parameter. Members keep their exchange-side account leverage set to at least 10x so orders have execution headroom; each strategy determines position size from current equity, so effective exposure can be much lower or higher than 1x without changing that exchange setting.

How This Simulator Works

This tool simulates price movement against a leveraged position. It shows modeled position equity, current PnL and an estimated liquidation price so you can explore the relationship between exposure and liquidation risk.

The simulation uses a simplified isolated-margin model with standard maintenance-margin assumptions. Exchange formulas, cross-margin collateral, fees and tiering differ, so verify any real liquidation threshold with your venue.