Leverage and position sizing

Beginner Questions
1

When calculating a position size using the calculator, it sometimes gives the maximum size that can be used. Sometimes that value is a huge number and if you took the full position it would give a high real leverage.

For example:

That would give a real leverage of 10:1 and I read over here that it is not recommended to use more than 4:1 or 5:1

My question is: In order to move the real leverage down to 5:1 do I increase the stop loss or select a lower position size than the one given by the calculator? Am I wrong?

2

Trust the Calculator to limit your RISK to the amount you have predetermined ($8 = 2% of your $400 balance), and don’t concern yourself with the actual leverage you are using.

If you control your risk and calculate your position size accordingly (which you have done in your example above), then the actual leverage you are using will take care of itself.

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