Position sizing: how much should one trade risk?

You can pick the right direction, set a sensible stop-loss, and still destroy your account. All it takes is trading too big. Position sizing is the calculation that prevents it, and it takes about ten seconds.

I put this second in the series deliberately. A stop-loss without position sizing is only half a plan — it tells you where to get out, but not how much pain getting out will cause.

The rule almost every professional uses

Risk a small, fixed percentage of your account on any single trade. Most disciplined traders use somewhere between 1% and 2%. Beginners should sit at the lower end.

Note carefully what that means. It does not mean putting 1% of your account into the trade. It means that if the stop-loss is hit, you lose 1% of your account. Those are completely different things, and confusing them is one of the most common beginner mistakes.

The calculation

Three numbers, one division:

1. Your risk amount = account size x your chosen percentage.
2. Your risk per unit = entry price minus stop-loss price.
3. Position size = risk amount divided by risk per unit.

Ten dollars of risk divided by $1,350 of risk per coin gives roughly 0.0074 BTC — about $500 worth of Bitcoin. If the stop is hit, you lose $10. Not $500. That distinction is the whole point.

Why this matters more than picking winners

Run the arithmetic on a losing streak, because you will have one. Everybody does.

• Risking 1% per trade: ten losses in a row leaves you down about 10%. Uncomfortable, entirely survivable.
• Risking 10% per trade: ten losses in a row leaves you down about 65%. Now you need to nearly triple what remains just to get back to where you started.

This is the maths that quietly ends most trading accounts. Not one catastrophic call — just a normal losing streak taken at a size that could not absorb it.

A tighter stop is not a smaller risk

Traders often move their stop closer to the entry so they can trade bigger size. That feels clever and it is usually a mistake — the stop is now inside normal market noise, so it gets hit on moves that mean nothing.

Let the chart decide the stop. Let the stop decide the size. Never the other way round.

Do it once, write it down

Pick your percentage today, before your next trade, and write it somewhere you will see it. Deciding your risk in the middle of a live trade is how discipline dies.

Every Tradebise signal gives you an entry and a stop-loss, which is everything the calculation needs. The last number — how much of your account you are willing to risk — is the one only you can set.