Guide 2 · Leverage and margin
Leverage multiplies the move of the price on the margin you posted. It does not multiply your profit, and it does not decide your risk - the stop loss and the size of the position do.
Leverage does not multiply your profit. It multiplies the move of the price, applied to the margin you posted. And the margin is the small part: the money you actually risk is decided somewhere else - by where you put the stop loss and how big the position is.
That single sentence untangles almost every misunderstanding about leverage. So let us use a real trade from our archive and watch the two percentages separate.
This is a closed signal from 8 October 2026: a short on ENA/USDT with 3x leverage. Entry, stop and targets as published:
| Level | Price | Price move | On margin (3x) |
|---|---|---|---|
| Entry | 0.22242 | - | - |
| Stop loss | 0.22538 | +1.33% | −3.99% |
| Take profit 1 | 0.22065 | −0.80% | +2.39% |
| Take profit 2 | 0.21887 | −1.60% | +4.79% |
| Take profit 3 (closed here) | 0.21710 | −2.39% | +7.18% |
Look at the last two columns. The price fell 2.39%. The margin gained 7.18%. That is what 3x does: it triples the move - 2.39 × 3 = 7.18. The same multiplication happened on the stop: 1.33% against the price became 3.99% against the margin.
And the result, written the way the engine writes it, is +1.80R. Notice that R never mentioned the leverage: R measured the trade, the leverage only decided how much money was needed to hold it.
Take a $1,000 account risking 1% per trade - $10 - with a stop 2% away from the entry. That is the same trade at three different leverages:
| Leverage | Position size | Margin blocked | Loss if the stop is hit |
|---|---|---|---|
| 2x | $500 | $250 | −$10 |
| 3x | $500 | $167 | −$10 |
| 10x | $500 | $50 | −$10 |
The loss is identical in all three cases. The position is the same size, the stop is in the same place, so the amount at risk cannot change. What changes is how much of your money is locked up while the trade is open: $250, $167 or $50.
This is the only honest case for leverage, and it is a real one: less margin blocked means the rest of your account stays yours. It becomes a trap when the money you set free is used to open the same trade bigger - because then the size grows, and with it the risk. The formula is in the position sizing guide.
Our engine publishes signals between 1x and 3x, averaging 2x. The stop sits on average 2.07% from the entry and the first target 1.24% away. That is deliberate: the targets are meant to be reachable by a normal intraday move, which is what makes a 57.6% win rate possible in the first place. Chasing a 10x return would mean targets far away and a win rate close to zero - and the arithmetic would not change: you would still be risking the same 1R.
The one rule that matters more than the leverage
Before opening anything, decide the amount you accept to lose on that trade - and put the stop where that number is respected. With that rule, leverage becomes a technical detail about how much margin is blocked. Without it, no leverage setting will save the account: leveraged trading can lose the whole amount you put in.
It changes how much money you must deposit to open a position, not how much you lose if the stop is hit. If you risk a fixed percentage of your account and place the stop at the same level, the loss is identical at 2x, 3x or 10x: only the margin blocked changes. What leverage does change is the fees (calculated on the position, not the margin) and how close the liquidation price is.
Because high leverage makes it easy to open a position that is too big. If you have $100 of margin at 10x you control $1,000 of position - and if you do not place a stop, a move of 10% against you takes the whole $100. With 2x the same $100 controls $200, and that same move costs $20. The danger is never the number "10x": it is the size of the position it allows.
It is a real advantage, and it is the only honest one: with higher leverage the same position blocks less margin, so the money you cannot lose to that trade stays in your account. But it only helps if the size stays the same. If you use the free margin to open the position twice as big, you have simply doubled the risk - which is what usually happens.
Between 1x and 3x, with an average of 2x. The stop sits on average 2.07% from the entry and the first target 1.24% away, so the leverage stays low on purpose: the engine aims for a target that a normal intraday move can reach, not for a lottery ticket.
Yes, indirectly, and it matters. Exchange fees are charged on the size of the position, not on your margin. If your position is $500, you pay the same percentage whether you posted $250 (2x) or $167 (3x). Where leverage does change your costs is when it pushes you to open bigger positions - on the trades we measured, fees came to about 0.034R per operation, which is roughly a fifth of our average edge per trade.