Crypto Position Sizing: The 1% Rule, Worked Out

The short answer: position size = (account × risk %) ÷ distance to your stop-loss. A $10,000 account risking 1% with a stop 5% below entry buys a $2,000 position — the stop distance sets the size, the risk percent sets the loss, and at 1% risk per trade it takes 69 consecutive losing trades to cut an account in half.

Most crypto position-size questions are asked backward: “how much should I put into this coin?” The professional version is “how much am I willing to lose if I’m wrong?” — and once that number and a stop-loss exist, the position size is no longer an opinion. It’s the one part of a trade that is pure arithmetic, and our position size calculator does it in four inputs.

The formula, worked once

Say the account is $10,000, the risk budget is 1% ($100), the entry is $100 and the stop is $95.

1. Risk per coin = entry − stop = $5.
2. Coins = $100 ÷ $5 = 20.
3. Position = 20 × $100 = $2,000.

If the stop fills, the loss is 20 coins × $5 = exactly the $100 you budgeted. Move the stop to $98 and the same $100 budget buys 50 coins — a $5,000 position. The dollar risk never changed; only the size did.

Why the risk percent stays small: the halving table

Every strategy has losing streaks — position sizing decides whether you’re still solvent when one arrives. The math is unforgiving in one direction only:

Risk per trade	Consecutive losses to halve the account
1%	69
2%	35
5%	14
10%	7
25%	3

This is why the boring 1% figure survives across every trading book: it’s not about confidence in any one trade, it’s about making the losing streak that will eventually happen survivable. Note the asymmetry too — a halved account needs a +100% run just to get back to even, which is the same arithmetic that makes drawdown recoveries take years.

A tight stop is a bigger position, not a safer one

The formula has a counterintuitive consequence: tightening the stop grows the position. Same $10,000 account, same 1% risk:

Stop distance	Position size
1%	$10,000
2%	$5,000
5%	$2,000
10%	$1,000
20%	$500

Below a 1% stop distance the “correct” position exceeds the whole account, which is where leverage quietly enters the conversation — the calculator flags exactly when that happens. Two honest cautions come with it. First, leverage adds liquidation risk the formula doesn’t see: an exchange can close the position before your stop is ever reached — check the liquidation price and read what each leverage tier actually survives before relying on a stop inside leverage. Second, crypto’s volatility makes very tight stops likely to be hit by ordinary noise rather than by your thesis being wrong — a stop that random movement triggers half the time isn’t a risk control, it’s a coin flip with fees.

Think in R, not in dollars

Once size comes from the formula, every trade risks the same amount — call it 1R. A trade that makes three times its risk is +3R; every stopped loss is −1R by construction. This makes performance legible: a strategy that wins 40% of the time at 2R average is profitable, and one that wins 70% at 0.3R isn’t. The calculator’s optional target field reports the R-multiple for the setup you’re considering, the profit calculator handles the fee-inclusive P&L on the way out, and when a winner runs, the take-profit ladder plans a staged exit instead of one all-or-nothing sell.

What the formula never does is pick the entry, the stop or the target — those are your analysis. It only guarantees that whatever you decided, a wrong call costs precisely what you agreed to pay for it.