In the crypto world, before opening a position, most retail beginners think: "How many Ferraris will I buy if this hits my target?" Top tier professional traders think: "If my stop loss gets triggered, what is the absolute maximum amount I am willing to lose (Risk Amount)?"
This is the dividing line between survival and ruin: Position Sizing.
Leverage is an Illusion
Beginners falsely believe that "high leverage = high risk." They think a 50x trade is inherently more dangerous than a 5x trade. This is completely wrong!
True risk does not depend on the leverage slider on your exchange. It depends strictly on: If the price hits your stop loss, what percentage of your total account capital burns away?
The 1% Risk Management Rule
Professional traders never allow a single trade to lose more than 1% to 2% of their total account equity. Why?
- If you lose 50% on a single trade, you need a 100% gain just to get back to breakeven.
- If you lose 100% (liquidation), the game is over.
- If you strictly limit your loss to 1%, it means you would have to lose 100 consecutive trades to go bankrupt. Without anxiety, there are no panic emotional misplays.
Stop Guessing. Calculate It.
Don't do the math in your head.
π Free Pro Tool: We have engineered a blazing-fast Position Size Calculator for you.
How to use it:
- Input your total account size (e.g., $10,000)
- Input your strict risk percentage (e.g., 1.5%)
- Enter your predetermined Entry Price and Stop Loss Price from the charts.
The engine will instantly calculate exactly how many tokens you should purchase. If you buy this exact token quantity, even with maximum leverage applied, a stop loss hit will result in exactly a 1.5% loss. No surprises.