4.6 Deterministic Leverage & TP/SL Derivation

From the global constraints, define:

B_pos = B / N
G = P / N
L_pos = L / N

Profit-Bounded Leverage

L_TP,min = 100 · G / (B · TP_max)
L_TP,max = 100 · G / (B · TP_min)

Loss-Bounded Leverage

L_SL,min = 100 · L_pos / (B · SL_max)
L_SL,max = 100 · L_pos / (B · SL_min)

Feasible Leverage Interval

L_feasible ∈ [ max(L_TP,min, L_SL,min, L_min),  min(L_TP,max, L_SL,max, L_max) ]

TP/SL Calculation

For a selected leverage L_sel within this range:

TP% = (G / (B · L_sel)) · 100
SL% = (L_pos / (B · L_sel)) · 100

Risk–Reward Ratio

RRR = TP% / SL% = G / L_pos

Dollar-Constant Risk

This structure keeps dollar risk and reward constant while percentage TP/SL levels compress as leverage increases.

Key Insight

Leverage	TP%	SL%	Dollar Risk	Dollar Reward
Low	High	High	Constant	Constant
High	Low	Low	Constant	Constant

The absolute dollar amounts remain fixed by your Discipline Profile, but the percentage distances scale inversely with leverage.