Leverage is borrowed exposure. With 10x leverage, $1,000 of margin controls a $10,000 position. A 1% move in the position is $100, which is 10% of your margin. The same multiplication applies to losses, which is why leverage is the fastest way to breach a loss limit.
Leverage limits vary by asset and by firm. Crypto leverage is usually lower than foreign exchange leverage, because crypto prices move further and faster. Kraken Prop, for example, offers 10x on bitcoin, 5x on solana, and 3x on hype, while some foreign exchange plans allow 30x. The limit on your plan is set per asset class, not as one number for everything.
This matters because leverage changes the meaning of your loss limits. A 5% daily limit on a $100,000 account allows $5,000 of loss, but at 10x leverage that loss needs only a 0.5% adverse move on a fully margined position. High leverage turns small market moves into account-sized results.
The common trap is choosing maximum leverage because it is offered. We recommend starting from the loss you are willing to take, then choosing the leverage that keeps a normal adverse move inside it. Prop trading can cost you every fee you pay.