Size the trade from the risk, not the other way round
Most losing accounts die the same way: the position was chosen first ("I'll put £2,000 into this") and the risk was whatever happened afterwards. Position sizing flips that. You decide how much of the account a single losing trade may cost, place the stop-loss where the trade idea is clearly wrong, and let those two numbers dictate how many units you buy.
The gap between entry and stop is the amount each unit can lose. Divide the money you are prepared to lose by that per-unit risk and you get the number of units, whatever the coin and whatever its price. Multiply by the entry price to see the position's cost in pounds.
Worked examples
Why 1% to 2% per trade
The point of the rule is survival through losing streaks, which every strategy has. Risking 1% a trade, ten consecutive losses cost roughly 10% of the account, which is recoverable. Risking 10% a trade, the same streak takes about 65% of the account, and you now need almost a tripling just to get back to even. Because losses compound against you (a 50% drawdown needs a 100% gain to recover), keeping each individual loss small matters more than any single win.
Crypto's volatility argues for the cautious end of the range. Stops need to sit outside normal daily noise, which makes stop distances wide, and wide stops already shrink the position the formula allows. If the calculated position value comes out larger than your account, the calculator flags it: opening it would need leverage, which multiplies liquidation risk on an asset that can move 10% in an hour.
Where to put the stop
The stop belongs at the price where the idea behind the trade is invalid, typically beyond a recent swing low or high, not at a round number of pounds you would prefer not to lose. Set the stop from the chart first, then let this calculator set the size; doing it in that order is the entire discipline. Remember that a stop order is an instruction, not a guarantee: in a fast market the fill can be worse than the stop price, so real losses can exceed the figure shown.
Never enter your seed phrase or private keys into any website, including this one. Sizing a trade needs prices and percentages, nothing more.
Crypto is highly volatile and largely unregulated in the UK, with no FSCS protection: be prepared to lose everything you put in. This page is guidance, not financial advice.
Frequently asked questions
What is the 1% risk rule?
It is the practice of risking no more than 1% of your account on any single trade, with 2% usually treated as the aggressive end. Risk here means the amount lost if the stop is hit, not the size of the position. Sized this way, even a run of ten straight losing trades only dents the account by around 10%.
Why is the position value sometimes bigger than my account?
A very tight stop means each unit risks only a small amount, so the formula asks for a lot of units. If the total cost passes your account size, you could not open the position without leverage. Either widen the stop, accept a smaller position, or reduce the risk percentage.
Does this work for short positions?
Yes. If the stop-loss you enter is above the entry price, the calculator treats the trade as a short and uses the same distance-based maths. The amount at risk is still the loss if the price moves against you to the stop.
Does a stop-loss guarantee I only lose that amount?
No. In fast or thin markets the price can gap straight through a stop and fill at a worse level, called slippage, and crypto trades around the clock with no circuit breakers. Treat the amount at risk as a planning figure, not a hard ceiling.
Is anything I enter sent anywhere?
No. All the maths runs in your browser and nothing is uploaded or stored. Never enter a seed phrase or private key into any website, including this one. A position size calculator only needs prices and percentages.