- Position sizing decides how much you lose when the stop is hit. It matters more than any single entry.
- The formula: position size = amount you are willing to lose ÷ distance to the stop.
- With correct sizing, leverage changes how much margin you lock up, not how much you can lose.
Why position sizing matters more than the entry
Even a good set of trades has losing streaks. Our own record is 79% wins over 511 trades, and there are still runs of two or three losses in a row. If each loss costs 20% of your account, three in a row is nearly half of it. If each costs 1%, three in a row is a bad week you barely notice. The entries were the same; only the sizing changed.
The position sizing formula
Risk amount = your account × the % you accept to lose on one trade (often 0.5% to 2%)
Stop distance = |entry − stop| ÷ entry
Margin needed = Position size ÷ leverage
Worked example: UNI short at 35x
Take a real signal: UNI/USDT short, entry 8.9390, stop 9.0922, target 8.5546, leverage 35x. Say your futures account holds $1,000 and you risk 1% per trade.
| Step | Calculation | Result |
|---|---|---|
| Risk amount | $1,000 × 1% | $10 |
| Stop distance | (9.0922 − 8.9390) ÷ 8.9390 | 1.71% |
| Position size | $10 ÷ 1.71% | ≈ $583 of UNI |
| Margin at 35x | $583 ÷ 35 | ≈ $16.70 |
| If the stop hits | 1.71% × $583 | −$10 (1% of account) |
| If the target hits | 4.30% × $583 | +$25 (2.5% of account) |
The target hit six hours later. On the record it shows as +150.51%, which is the return on that $16.70 of margin. For the account, it was +2.5%, with a known risk of 1%. That is what a healthy trade looks like from the account's point of view.
Leverage does not change the risk, the size does
Run the same trade at 5x instead of 35x. The position is still $583, because it is set by the stop distance and the $10 you accept to lose. Only the margin changes:
| Leverage | Margin used | Loss at stop | Gain at target |
|---|---|---|---|
| 5x | $116.60 | −$10 | +$25 |
| 10x | $58.30 | −$10 | +$25 |
| 35x | $16.70 | −$10 | +$25 |
Higher leverage frees up margin and brings the liquidation price closer, which is the real cost. Our guides on how much leverage to use and liquidation price cover that.
Position size calculator for crypto (by stop distance)
Quick reference for a $1,000 account risking 1% ($10). For other account sizes, scale the numbers: a $5,000 account risking 1% multiplies every position by five.
| Stop distance | Position size | Margin at 10x | Margin at 20x |
|---|---|---|---|
| 0.5% | $2,000 | $200 | $100 |
| 1% | $1,000 | $100 | $50 |
| 1.5% | $667 | $67 | $33 |
| 2% | $500 | $50 | $25 |
| 3% | $333 | $33 | $17 |
| 5% | $200 | $20 | $10 |
Position sizing for forex signals
Forex works the same way, measured in pips. AUD/USD short at 30x had its stop 12 pips from entry. Risking $10 means $0.83 per pip. On a USD-quoted pair a standard lot is worth about $10 per pip, so that is roughly 0.08 lots. The target was 25.3 pips away: about +$21 if hit.
Common mistakes
- Sizing by margin instead of risk: "I always put $50 in" means every trade risks a different amount.
- Raising size after a loss to win it back. That is how streaks become blow-ups.
- Ignoring fees and slippage: on very tight stops they are a real part of the loss.
- Too many trades at once: five open trades at 1% each is 5% at risk if the market moves against all of them.
Get the next trade the moment we take it
Each of our signals has a stop loss, so you can size every trade before you take it. Signal Pilot sends the exact trades our desk takes, with entry, stop loss, targets and leverage, the moment we enter. You pay per signal: $1 for crypto, $3 for forex and stocks, minimum 10. No subscription, credits never expire, and if a trade is cancelled before entry the credit comes back.
Frequently asked questions
What is position sizing in trading?
Choosing how big a trade is so that, if the stop loss is hit, you lose a fixed, small part of your account.
How much should I risk per trade?
Many traders risk 0.5% to 2% of their account per trade. Beginners usually do better at the lower end.
How do I calculate position size in crypto?
Divide the amount you are willing to lose by the distance from entry to stop, as a percentage. Then divide by your leverage to get the margin.
Does leverage increase my risk?
Not if you size by the stop: the loss at the stop stays the same. What changes is the margin used and how close liquidation is.
Is there a position size calculator for crypto?
The table above works as a quick one; any spreadsheet can do the formula: risk ÷ stop distance.
Risk warning: trading crypto, forex and other markets with leverage carries a high risk of loss, and you can lose more than you deposit. This article is education, not financial advice. Past results do not guarantee future results.