Position Sizing for Crypto Trading: How Much Should You Buy on Each Trade?
Most traders spend hours choosing entries and minutes deciding how much to buy. It should be the other way round. Position size determines how much a losing trade costs you — and since every trader has losing trades, sizing is what keeps you in the game long enough for a good strategy to work.
The principle: decide your loss first
Instead of asking "how much should I buy?", ask "how much am I willing to lose if this trade is wrong?" Then let the distance to your stop-loss determine the size.
Run your own numbers with the free calculator: Position Size Calculator
Open calculator →The formula
Risk amount = Account balance × Risk per trade (%)
Position size (units) = Risk amount ÷ (Entry price − Stop-loss price)
For a short trade, use (Stop-loss price − Entry price).
Worked example: spot trade
- Account: $5,000
- Risk per trade: 1% → $50
- Entry: ETH at $3,000
- Stop-loss: $2,850 (a $150 or 5% move)
Position size = $50 ÷ $150 = 0.333 ETH, worth about $1,000.
If ETH hits your stop, you lose about $50 — exactly 1% of the account, plus fees. You are buying $1,000 of ETH, but your risk is $50.
Same risk, different stops
| Stop distance | Position size | Position value |
|---|---|---|
| 2% ($60) | 0.833 ETH | $2,500 |
| 5% ($150) | 0.333 ETH | $1,000 |
| 10% ($300) | 0.167 ETH | $500 |
A tight stop allows a larger position; a wide stop requires a smaller one. The loss if stopped out is $50 in every case.
Adding fees
Fees are paid on entry and exit and should be included in your risk. If you pay 0.1% on each side, each unit costs about 0.2% of the entry price in fees. The precise formula becomes:
Units = Risk amount ÷ (|Entry − Stop| + Entry × fee rate × 2)
How leverage fits in
Leverage does not change the right position size. It only reduces the margin you need to hold it. In the example above, a $1,000 ETH position at 5× leverage needs $200 of margin. Your loss at the stop is still about $50.
The danger is that leverage makes it easy to open positions far larger than your risk rule allows. Read how leverage works.
How much to risk per trade
Common guidelines:
- 0.5–1% for most traders, especially while learning
- Up to 2% for experienced traders with a tested strategy
- More than 3% is aggressive; a losing streak can quickly cause deep drawdowns
The 1% rule explains why small risk percentages matter so much.
Common sizing mistakes
- Sizing by conviction. Feeling sure about a trade is not a reason to risk more.
- Moving the stop to fit the size. The stop should be based on the chart; the size adjusts to the stop, not the other way round.
- Ignoring correlation. Three long positions in BTC, ETH and SOL behave almost like one big position.
- Forgetting slippage. In fast markets, stops can fill worse than planned.
Calculate your size
The position size calculator takes your balance, risk percentage, entry, stop, leverage and fees, and returns the exact position size, margin required and estimated liquidation price.
CryptoMathly provides educational estimates only and is not financial, investment or tax advice. Crypto assets are volatile and you can lose money. Always verify figures with a qualified professional.