Leverage gets blamed for every blown account, but leverage is just a margin calculation. What breaches evaluations is position size relative to stop distance. Get that relationship right and 10× leverage is a tool; get it wrong and 2× is enough to end you.
The only formula you need
Decide your risk per trade as a fraction of the room you actually have — the distance between current equity and your daily floor. A durable default:
From there, size is mechanical: size = risk ÷ stop distance. Say you trade a $50,000 account, equity at $50,000, floor at $47,500 — daily room $2,500, so risk budget ≈ $830 per trade. BTC at $60,000 with your stop 1.5% away ($900 of movement per BTC… per 1 BTC that's $900): you can hold roughly 0.92 BTC ($830 ÷ $900). Notional ≈ $55,000 — barely over 1× leverage on the account, and that's correct for a tight-stop trade. Widen the stop to 4% and the same risk budget only buys 0.35 BTC.
Why your size must shrink as your day worsens
Daily room isn't static. Lose $1,200 by lunchtime and your room is down to $1,300 — your next trade's risk budget drops to ~$430, roughly half. Most breaches are exactly this failure: sizing trade #4 like trade #1 after three losses. The floor didn't move; the trader's discipline did.
- Fresh day, $2,500 room → risk ≈ $830
- Down $1,200 → room $1,300 → risk ≈ $430
- Down $2,000 → room $500 → risk ≈ $160, or honestly: stop for the day
The martingale mirage
Doubling size after losses feels like it "must" work — and on a prop account it's mathematically the fastest way to convert a survivable day into a breach. The floor is an absorbing barrier: one oversized loser doesn't set you back, it ends the account. Evaluations reward the boring math above precisely because the downside is terminal.
Where leverage actually matters
Leverage determines the initial margin required for a position. Under leverage-v2, BTC allows up to 50× and ETH up to 25× per order. Separate exposure caps still apply: BTC 15×, ETH 10× and combined 20× the lower of starting balance and equity after order costs. Pending orders also reserve capacity. If your risk budget supports 0.92 BTC, a higher leverage setting does not make a larger position appropriate for that budget.
Your terminal shows daily room and max-drawdown room live, updated every tick — the two inputs this whole article runs on. Size from them, not from your conviction.