Start with loss, not leverage
Choose a maximum tolerable loss and a market-based invalidation level. Position notional follows from those values. Selecting maximum leverage first usually forces a stop inside ordinary price noise.
Leverage changes the relationship between a move and account equity; it does not improve the forecast.
Why 2% and 1% are incomplete
Fifty-times leverage is often associated with two percent and 100x with one percent because those moves equal initial margin in a simplified model. Liquidation generally occurs sooner due to maintenance requirements and costs.
Use the live venue calculator and verify its inputs. The full leverage math guide walks through a numerical example.
Portfolio exposure can hide leverage
Several lower-leverage positions can create more total risk than one high-leverage position. Shared collateral, correlated assets, and volatile collateral make account-level stress testing essential.
Track notional, stress loss, liquidation buffer, and collateral concentration in one view.