Educational content only. Not financial advice. Trading crypto carries risk, including total loss.
Why sizing matters more than entries
Two traders can have the same win rate and end up in completely different places, purely because of position size. A trader who risks a small, consistent slice of the portfolio per trade can be wrong many times in a row and still have most of the portfolio intact. A trader who risks a large slice can be wiped out by a short losing streak, even with a perfectly reasonable strategy.
Picking a risk-per-trade number
A common starting framework: decide on a fixed percentage of the total portfolio that any single trade is allowed to lose — often somewhere well under ten percent, frequently much lower for anyone trading frequently. Never risk more on a single trade than the amount of loss that would be genuinely acceptable to absorb. This is not a guarantee of profit; it only bounds how bad a single mistake can be.
Position size calculator
Enter a portfolio size, a risk percentage, and an entry and stop price to see the position size that keeps the dollar risk at the chosen level.
Sizing is not the same as diversification
Risking one percent per trade on ten highly correlated tokens is not the same as one percent risk overall — if they move together, the effective risk multiplies. Position sizing controls the size of a single bet; diversification controls how many correlated bets are open at once. Both matter, and neither substitutes for the other.
Common sizing mistakes
- Sizing by conviction instead of by risk. A trade that feels certain is still a trade that can be wrong.
- Moving the stop instead of accepting it. Widening a stop after entry changes the actual risk without changing the position size that was set for the original risk.
- Ignoring correlation. Several "different" positions that all fall together on bad days behave like one large position.