There is a structure where losses do not stop at your principal. How liquidation works.
Adding borrowed money to your own to trade a larger amount is called leverage. At ten times, you move with ten times your capital, so gains multiply by ten and losses do exactly the same. What matters is that the point where losses reach 100% of your capital comes far closer. At ten times, a 10% move against you removes the principal entirely.
When margin falls below a threshold, the exchange force-closes the position. This is liquidation, and there is no room for human judgement in it. Regardless of any belief that the price will return, it closes the moment the threshold is touched. In volatile markets that point can be reached within minutes.
Holding a position over time incurs a fee at regular intervals. Even with the direction right, accumulating cost reduces the gain, and it keeps draining while the price goes sideways. This is why using a tool designed for short holding periods over long ones puts you at a structural disadvantage.
During sharp moves, orders may not fill at the price you expected. Liquidation processing can also lag, making the loss larger than the calculation suggested. The safety mechanism is weakest exactly when it is most needed, and strategies aiming at volatile periods carry more of this risk.
This explains only how leverage works. What multiple is appropriate, or when to enter, depends on individual circumstances and is not something writing like this can decide. What is certain is that leverage makes losing much faster, and that no multiple is appropriate with money you need to live on or money you borrowed.
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