How Much Should You Risk Per Crypto Trade? Position Sizing Explained

Risk 1 to 2% of your whole account per trade. Not 1 to 2% of your margin: of your whole account. And that number only protects you if you size the position from your stop. Here's why 1% works, how to size a trade by hand, the leverage mistake that blows up accounts, and how to let AI do the maths in one tap.

Why 1% works: losing streaks

Every trader has losing streaks. Even a good strategy can lose five trades in a row. Here's what that streak does to an account at different risk levels:

Losses are harder to win back than they look. That's why so many traders keep it at 1 to 2%: small enough to survive a bad run, big enough to matter.

Your risk is not your position size

This is the part most people skip. Your risk isn't how big the position is. It's what you lose if your stop gets hit. So you size the position from the stop:

Position size = the amount you're willing to lose ÷ the distance to your stop (as a %)

Worked example: sizing a Bitcoin trade by hand

• Account: $1,000. Risk: 1%, so $10.
• Entry: 75,890. Stop: 75,520. That's $370 away, about 0.49%.
• Position size: $10 ÷ 0.49% = about $2,050 (0.027 BTC).

If the stop is hit, you lose $10, exactly as planned. Notice the position is about twice the size of the account and the risk is still only 1%. That's where leverage comes in.

The leverage mistake that blows up accounts

Most people pick the leverage first (10x, 20x, 50x) and then put in whatever margin feels right. But leverage doesn't decide what you lose. Your position size and your stop do. Leverage only decides how much margin the exchange holds for the trade. Here is the same $2,050 position at different leverage:

The loss at the stop is the same $10 until the leverage gets so high that liquidation sits above the stop. Then the exchange closes you out before your stop ever gets a chance. Liquidation prices here are estimates with a 0.6% allowance for maintenance margin and fees; each exchange uses its own tiers.

So the order is: risk first, then the stop, then the size. Leverage comes last.

How CoinGPT does the maths for you

Doing this on every trade is slow, and easy to get wrong when the market is moving. In CoinGPT it all happens on one screen, Review & Execute:

1. Take a setup from the Trade Agent: entry, stop and target already drawn.
2. Pick your risk: 1, 2 or 3% of your balance, or a custom amount. It shows the loss at the stop and the gain at the target before you place anything.
3. The position size is worked out from your stop. The leverage is set for you: the lowest that keeps your margin under a quarter of your balance and your liquidation price at least twice as far away as your stop. In the example above that's 10x.
4. Change the leverage yourself and watch: the loss at the stop doesn't move. Only the margin does.
5. Push the risk higher and it warns you. Then choose how to get in and tap place. The order goes to your own exchange with the stop and target attached.

In a fast market, price can still jump past a stop, so keep your size sensible.

Next in the series: where to put your stop loss, and how the Trade Agent plans it.

Questions

This guide is for education only and is not financial advice. AI analysis can be wrong, and in a fast market price can move past a stop. Trading involves substantial risk of loss. Review every setup before you trade.