Position sizing is the single most important risk-management habit in trading. It tells you exactly how many coins to buy so a losing trade costs you a set, survivable amount — not your whole portfolio.
🎯 Calculate Your Position Size
Why Position Size Before Entry?
The order matters. Most losing traders figure out their risk after they’re already in the trade. Position sizing forces you to decide, before you click buy: “if this trade goes wrong, how much am I willing to lose?” The answer should be a fixed percentage of your portfolio — most professionals use 1–2%.
That single number, combined with your stop-loss distance, mathematically determines how many coins you buy. It removes the emotional “how much should I put in?” guess entirely.
- 1% rule — never risk more than 1% of your account on any single trade.
- Stop-loss first — your entry and stop define the risk per coin; sizing follows from that.
- Survive to trade again — a string of losing trades shouldn’t be able to empty your account.
For matched-up guidance, see our guides on crypto stop-loss and risk management and exchange comparison before you size a position.
What the Numbers Mean
| Term | Meaning |
|---|---|
| Risk amount | Portfolio size × risk percentage — the actual dollars you’ll lose if stopped out |
| Risk per coin | Entry price − stop price — how far the coin must fall to hit your stop |
| Position size (coins) | Risk amount ÷ risk per coin — how many coins to buy |
| Notional value | Position size × entry price — the dollar value of the position |