The exposure factor asks a simple question: how much leverage were you carrying at your most exposed moment? It looks at your peak combined position size across every open trade at the same time, relative to the account. Two traders can make the same profit, one by carrying modest size throughout, the other by briefly stacking heavy leverage. The score can tell them apart, and it prefers the first.
Peak combined, not per trade
The key word is combined. The factor does not look at your largest single trade. It looks at the total exposure you had on at once. Three positions of one lot each, all open together, count as three lots of exposure at that moment, not one. This is deliberate. Real risk is the sum of what you have on when the market moves, not the size of any one ticket, and traders who feel safe because each individual trade is small often carry dangerous combined leverage without noticing.
Why controlled size scores better
Heavy leverage is the easiest way to turn a small edge into a big number, and the easiest way to turn a small mistake into a blown account. The score rewards making the money with less exposure because that profit is more repeatable and less dependent on the market being kind at the exact wrong moment. Modest combined leverage keeps most of this factor. The more total size you stacked up to make the day, the less of it you keep.
Managing your peak
Because the factor captures your single most exposed instant, one careless overlap can define it. If you are scaling into a position, be aware that holding all the pieces open at once creates a peak larger than any single entry. The same is true when a new trade opens before an old one is closed. Keeping a rough running sense of total open size, and trimming before adding, keeps your peak where you want it and your exposure score high.