strategy
Risk Management for Crypto Traders: Position Sizing Guide
Position sizing, stop losses, and the mental rules that separate traders who survive from those who don't.
MK
Mike Kwan
Risk Management for Crypto Traders
The difference between profitable traders and blown accounts isn't about finding the perfect entry. It's about managing risk.
The 1% Rule
Never risk more than 1% of your total portfolio on a single trade.
Position Sizing Formula
Position Size = (Account Size x Risk %) / (Entry Price - Stop Loss Price)
Position Size = (Account Size x Risk %) / (Entry Price - Stop Loss Price)
Stop Loss Strategies
| Strategy | Best For | Risk Level |
|---|---|---|
| Fixed % | Beginners | Low |
| ATR-based | Swing traders | Medium |
| Structure-based | Technical traders | Medium |
Key Takeaways
- Risk management is more important than entry timing
- The 1% rule protects you from catastrophic losses
- Always use stop losses — no exceptions
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