Adjusting the levers is as important as getting shoes the right size! Levers are very important for complete control.
The basic position of your hands should include one or two fingers on each lever, brake and clutch. These must be adjusted to make that position comfortable - after you positioned the handlebar.
Having the levers in easy reach and functional is one of the things that keeps you out of the hospital :) besides letting you go faster.
The first thing is to adjust the up/down position of the levers. They should be just a little below horizontal. The 'old school' style was to have them quite at a high angle below horizontal, to follow the wrists as you're standing, but the new school of thought says that they should be almost horizontal. That will decrease fatigue and arm pump and result in a better position of the hand/wrist: you can grip them better with one/two fingers while keeping the wrists lower to avoid jerking the throttle on rough ground / landing etc.
The next thing is to adjust the clutch and brake lever mounting points on the handlebars (left/right). You don't what them too far in or out, just right. The way it should be is to move them inside so that when pulling the lever, the bend in the lever touches the outside of the grip's donught. That is the most comfortable position, so one-two fingers are on the lever right at the bend and the others are all on the grip.
Some prefer to move them in even more, so that you get more leverage on non-hydraulic clutches...? Up to you. I used to do that and it worked for me at that time.
Of course, remember that you can move the other stuff you have there, like switches, mirrors and barkbusters, to have the levers in the proper position - they are the most important!
When you tighten them back on the bars, make sure you don't over-tighten... they should stay firmly in place, but should be able to give in a bit in a crash rather than break.
The last thing is to adjust play. Read the bike's manual on that - normally 10mm of play is recommended.
Many levers come with adjustments as to how far from the grip they engage. This works in combination with the play above: you want them to be fully functional before reaching your other two fingers which are holding the grips, otherwise it will be ouch time half-way through the race. At the same time, not too far out so that you can't keep a finger on them.
The reason why is that you need to be able to apply full brakes without lifting your two little fingers. Likewise, if the clutch is not completely disenganged before the lever touches the two little fingers, it will heat up too much and make for poorer shifts in general.
Remember that the finger doesn't just rest on them for fun, but for quicker reaction. It must have control of the lever!
Shorty levers are very good. The point is that OEM levers are too long generally and will keep hitting the small fingers that control the grip. The short levers only have room for two fingers on them and don't cause pain. Also, you can have them be closer to the grip, because they have a longer travel (won't stop 10mm from the grip when hitting the two knuckles, but can be pulled all the way to the grip.
Honestly - I don't understand why OEM are still so long - maybe to sell you the shorter ones for extra cost? It is unsafe to use all four fingers on a lever - simply because then you're not holding onto the bars anymore and can loose control of them easily! If you have an older bike that won't brake fast enough with only two fingers, sell it.
Unbreakable levers can rotate in several directions, to avoid braking them in a crash. I used to crash a lot and did not brake any stock levers, though I have seen quite a few. If you're serious about racing though, you certainly want them.
Even the OEM levers are normally designed so when they break, there is still some piece left that you can use to get home. Otherwise you might be pulling the clutch cable with your... teeth?
The rear brake lever should be level with the peg, and have a small play. See the owner's manual on adjusting the play there. The point is to make sure you don't keep your boot on it and heat the brakes for no reason - you might find yourself without brakes after a while.
You will find that standing or sitting makes a big difference in how easy you can use the rear brake lever. You will want to re-adjust it as you progress from sitting to standing most of the time.
One other thing to check about the rear brakes is how much 'in' they are and return them to 'normal'. These are easy to bend and they tend to tuck into the engine case or under it and be hard to find with the boot. Especially on kids bikes, which have a smaller perch - bend them back to get them out but... not too far out so they are too exposed.
Brake savers are a good addition while you're here. These save the brake pedal from being ripped off the bike by a stump or such. You can easily make one from some steel cable.
The shifter should be level or slightly higher than the peg: the motocross boots are quite thick and you need to get it under there and upshift easily. Not too high as to require you to lift the boot off the peg to downshift though.
Put the bike on a stand and stand up on it. Keep using and adjusting all levers until it feels good.
Other dirt bike setup topics:
Here is more stuff to read / watch related to lever adjusments:
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