How to size a trade from the stop distance instead of from the leverage slider, with a worked example and the scaling rules that keep an account alive.
Most traders choose a leverage, type in a margin, and only then discover what they could lose. Professionals do it backwards. They decide the dollar loss they accept on this trade, find where the stop belongs, and let the size fall out of those two numbers. Leverage becomes an afterthought, a ratio the exchange displays rather than a decision you make.
Risk a fixed fraction of the account on each trade. One percent is the standard for newer traders; two percent is the ceiling for experienced ones. With a $10,000 account that means a planned loss of $100 per trade. Not $100 of margin: $100 of loss if the stop is hit.
Position size equals planned risk divided by stop distance. If your stop is 2% from entry and you accept a $100 loss, your position is $5,000. With $1,000 of margin that is 5x leverage. If the stop is 0.5% away, the position is $20,000 and the leverage is 20x. The leverage changed because the stop changed, not because you felt confident.
Ten losses in a row at 1% risk costs about 10% of the account, which is unpleasant and survivable. Ten losses in a row at 10% risk costs 65%, which is the end. Streaks of ten losses happen to good traders with good systems; they are a property of probability, not of skill. Sizing is the only variable that decides whether a normal streak is a bruise or a funeral.
Adjust risk by results, not by mood. If the account is up 20% on the month, you may raise risk to 1.5%. If it is down 10%, cut to 0.5% until you are back to break-even. A winning streak is exactly when most traders triple their size and give it all back; a written rule prevents that.
The sizing formula is simple, but doing it under pressure is not. Rehearse it on paper trades until it is automatic. If you practice on a simulator, use a balance close to your real one; sizing a fake $1,000,000 account teaches nothing about a real $5,000 one.