So you think 6:1 is too much. What's typical among successful hedgefunds? Eurostoxx50 isn't that volatile, it's crawling most of the times, so 6:1 "feels" ok to me. (On the other hand, even 1 contract on GBL "feels" like too much risk). Anyway, admittedly I don't seem to have a rock-solid money management. I rather work with a few rules-of-thumb, which work OK for me so far.
I know 6:1 is too much for me. A 0.50% adverse move in ESTX50 will cause a 3.00% drop in equity. That's just 20 ticks. Of course it works both ways. However, leveraged directional funds with high returns invariably exhibit high downside volatility. See Schindler Trading (before April 2005) and Matador Fund. Did you read the Monroe Trout interview in the first Market Wizards book? I found his approach to risk management simple and elegant - and conservative, hence the low downside volatility of Trout Trading++