Crypto Position Sizing: How Much to Risk per Trade

Position sizing in crypto is deciding how much of your account a single trade may cost you, and then working backwards to the size that makes it true. Most beginners do the opposite: they pick a size that feels exciting and discover the cost afterwards. A common answer to how much to risk per trade is 1% to 2% of the account - small enough that a losing streak is annoying rather than fatal.

How do you turn a stop into a size?

With one line of arithmetic: position size equals the money you are risking divided by the distance to your stop. Say the account is $2,000 and you risk 1%, so $20. If you buy Ethereum and your stop sits 4% below the entry, then $20 divided by 0.04 gives a $500 position. That is the whole method. The stop decides the size, and the size is never decided first.

Why does the risk come before the trade?

Because losses compound against you faster than gains compound for you. Lose half an account and you need to double what is left just to get back to level. Think of it as a shop owner's rule: no single customer gets to walk off with the month's takings, however promising they look. Keeping each loss to 1% means twenty bad trades in a row still leave most of the account intact - and twenty bad trades in a row happen to everyone eventually.

What usually goes wrong?

• Sizing by conviction. The trade you feel most sure about is not statistically different from the others; it just feels louder.
• Moving the stop. Widening it mid-trade silently doubles the risk you calculated.
• Counting only one position. Five open longs on Bitcoin, Solana and three smaller coins are one trade wearing five hats, because they usually fall together.

Put the formula in a spreadsheet before your next trade and let it tell you the size, even when the answer looks disappointingly small. Doing this consistently for a month changes results more than any new indicator will. Next: the 1% risk rule in detail and how much leverage to use.