Lesson 1 of 6 11 min read
Position sizing from your stop
The formula that keeps every loss a planned amount.
Fixed-risk sizing
Decide what percent of your account you'll risk per trade (commonly 0.5–1%). Size = (account × risk %) ÷ distance to stop.
Worked example
Account $10,000, risk 1% = $100. Entry $100, stop $95 — $5 per coin. Size = $100 ÷ $5 = 20 coins ($2,000 position). If stopped, you lose about $100 plus fees.
Why it matters
Sizing from the stop means wide stops get smaller positions and tight stops larger ones, while the money at risk stays constant.
Key takeaways
- Size = risk amount ÷ stop distance.
- Risk per trade stays constant; size varies.
- Small risk per trade survives losing streaks.
Exercise
Calculate position size for three different stop distances on your own account at 1% risk.
Educational content only, not financial advice. Crypto is volatile and you can lose money.