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High Leverage is a Trap: Why Lot Sizing Trumps Available Margin

Sachin Yadav

High leverage allows you to open large position sizes, but it does not change your prop firm’s maximum loss rules. A 1:100 leverage account lets you open massive lots that can blow through a 4% daily drawdown limit in a single candle. Size your trades based on stop-loss distance, not maximum allowable leverage

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