Before opening a perp trade, slow the decision down. A simple checklist can stop you from discovering leverage mechanics after the position is already open.
This is not a strategy. It is a risk hygiene pass for beginners.
1. What market am I trading?
Know the exact contract, the asset it tracks, and whether it is a major crypto, meme coin, stock-linked market, commodity, or index. Different markets have different liquidity, volatility, funding behavior, and trading hours assumptions.
2. What is my notional size?
Do not only look at collateral. If you post $100 at 10x, you are taking about $1,000 of exposure. Ask whether you would be comfortable taking that exposure in spot.
3. What is my liquidation price?
Check it before submitting. If normal volatility can hit your liquidation price, the position is probably too large or too leveraged.
4. What margin mode am I using?
Know whether the position is isolated or cross margin. Isolated margin contains risk more clearly. Cross margin can use more account equity to defend the position, which can also put more equity at risk.
5. What is funding?
Check whether you are likely paying or receiving funding. A position can be directionally right but still expensive to hold if funding is high and your trade takes time.
6. Where am I wrong?
Define the price or condition that invalidates the trade. That exit should usually happen before liquidation. If your only exit plan is liquidation, you do not have a trade plan.
7. What happens after entry?
- Know where you would reduce size.
- Know where you would close.
- Know whether you will add margin or refuse to add.
- Know how long you are willing to pay funding.
A good checklist will not make every trade profitable. It helps make losses intentional, bounded, and understandable.
Risk note: Perps can liquidate quickly, especially with high leverage. This article is educational content, not financial advice.