I'm testing a daily/end of day equity strategy and wanted to know best practices for applying leverage..such as 2:1 or 3:1, etc. I would think risk profile is also important here, however are there any general rules of thumb for when leverage makes sense vs not make sense? For instance, should volatility and max drawdowns be below a certain threshold, etc? Are there any other statistics/metrics i should look at first before even thinking of using leverage?
Thanks for the input!
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