The leverage that actually matters
Traders watch the per-trade leverage slider and ignore how big their positions are versus their whole account. Effective leverage is the honest number. Check where it liquidates with the liquidation calculator and cap total risk with portfolio heat.
Notional ÷ account balance — not the slider you set on the exchange
You have a $1,000 account. You open a $200 collateral position at 5x — that's $1,000 notional. Your effective leverage across the whole account is $1,000 notional ÷ $1,000 balance = 1x effective. Open another $300 position at 10x ($3,000 notional) and total effective leverage is $4,000 ÷ $1,000 = 4x.
This number matters because it tells you what a 1% market move does to your account. At 4x effective leverage, BTC dropping 1% costs you 4% of your account balance — not 4% of any single position. When multiple positions correlate (all long in a risk-off event), they all drop together.
Most professionals target 1–3x effective leverage across the account. Day trading accounts sometimes run higher. The problem isn't the per-position leverage setting — it's the sum of all open notionals relative to your total equity that determines actual risk exposure.
Related: position sizing, max leverage for drawdown, margin calculator.