Example for hedge trading: You have $100,000 in spot BTC. You open a $10,000 short position with 10x leverage. Your Short position now equals $100,000, the same amount as your spot holdings. This gives you a 100% hedge ratio, effectively protecting both sides during highly uncertain times. If, for any reason, your $10,000 short gets liquidated due to a 10% price increase, calculate the result on your spot bag: the spot position gained $10,000 while the short lost $10,000. Net result? Break-even. You played it perfectly and now have time to decide your next move. This type of trading is only recommended during extreme uncertainty, or when war is on the horizon. I always follow this step and it’s the golden rule in trading. I will repeat it again and again, capital protection is the highest form, the highest art in trading.